Economic Issues
The Central Bank of Nigeria & It’s Limits -By Udeze Daniel Jr.
As much as the central bank cannot dictate profit and loss or may I use the modern term ‘ income statement of the bank’. It will be highly debatable and will require more than just a directive to effect this.
Weeks ago, Herbert Wigwe, the Isiokpo born CEO and GMD of Access Bank Plc had announced that it would not be able to continue with nearly 75% of it outsourced staff and would further be taking a 40% remuneration cut from bankers wages, the Central bank appeared to have come to the aid of the almost disrupted individuals concerned.
The apex bank issued a directive barely 72 hours of the CEOs announcement making lay-offs in the banking sector illegal. An excerpt of this directive is as follows “… No bank in Nigeria shall retrench or layoff any staff of any cadre including full-time and part-time… The express approval of the Central bank of Nigeria must be required in the event that it becomes absolutely necessary to lay off any of such staff…”
However, the Central bank has left itself in a precarious situation; the role of the central bank in dictating the manning level is highly contestable both by the labor act and by the doctrine upon which corporations are formed.
In determining the parties to an employment contract, the central bank is entirely not in the appearance, notwithstanding its regulatory laws and functions, it would require a new inclusion clause(s) in the labor act perhaps for banking regulations to require the apex bank to prevail on hiring and firing criteria.
As much as the central bank cannot dictate profit and loss or may I use the modern term ‘ income statement of the bank’. It will be highly debatable and will require more than just a directive to effect this.
I do pray that the central bank is serious about it and ready to contest with the commercial banks and associated financial institutions so that the poor bankers and financial employees are not left in the hands of an institution that won’t fight it’s case to a logical end.
NB. If the Nigeria Stock Exchange is run like a typical market, one would expect all the banks to lose at least 20% of their market capitalization on the next trading day since they are no more independent entities. But of course this is Nigeria.
