Lockdown: Salary Earners Will Also Cry by Omooba77: 11:06pm On Apr 20, 2020 |
By Olukorede Yishau I do not intend to scare you but by the time President Muhammadu Buhari speaks to us again to either end the lockdown or extend it, many of us will receive sad news: salaries will not be paid. It will not be because our employers are wicked; it is just that companies are closed and money is not made. Companies that have been operating have not done so at full blast and whatever revenue has been earned is bound to be infinitesimal and incapable of footing bills.
You may wonder why companies will not go into their reserves to cushion the effect of the financial dire strait caused by the pandemic and my response is – many companies in Nigeria are like the Federal Government, with severely depleted reserves, or no reserves at all! They are run based on what I see as ‘run-as-you-go’. If they do not earn money in a particular month, surviving the next month will be like a blind man trying to fix thread into a needle.
Our foreign exchange reserves fell to $34.58 billion on April 7. The reserves had $38.53 billion on January 2. No less than $3.95 billion has been taken away from it in the last three months. Oil price has tumbled to an all-time low and, being a mono-economy, we have no choice than to keep dipping our hands into the reserves. Soon, there may be nothing there again as it is the situation for many businesses in the country. Every government since we returned to democracy in 1999 has been mouthing diversifying the economy, but this has always ended up as mere campaign sloganeering. No concrete effort is discernible along this line.
The terrible shape of our Almighty black gold is captured in the words of Dr Sun Xiansheng, the Secretary-General of International Energy Forum: “The global spread of the Coronavirus is creating a demand shock that is impacting the already fragile world energy market balances. Markets are continuing to assess the yet unknown risks of COVID-19 to the global economy as the disease continues to suppress economic activity.
“Low oil prices combined with the inelastic nature of refined product supply and demand is usually a boon to refining margins. However, COVID-19 also impacts downstream profitability caused by erosion in demand. The combination of sustained shocks to supply and demand will cause product inventories to rise to new highs.”
The country this week joined other Organisation of Petroleum Exporting Countries (OPEC) counterparts to cut 9.7 million barrels of supply to raise price and save countries like Nigeria, which depends on oil cash, from starving.
Minister of State for Petroleum Resources Timipre Sylva said the cut in production would enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term. Good as the expected effect of this decision sounds, its fruit will not be immediate and, even if it is, I do not see it translating into helping stop our tears.
There are fears that the country will soon slip into recession. The last time we went into recession, shortly after Buhari took over the reins of power in 2015, we saw hell. Many companies could not pay salaries for months, and when they eventually started meeting their obligations to their members of staff, it was because investors recapitalised. Recession at a time like this is like jumping from frying pan to fire. But it does not look like we can avert it.
From what I can see, it is not only transporters and others who earn daily money that are crying or will cry, salary earners will soon cry when at the end of the month, it is either they get half-pay or they are not paid at all. An employer told me during the week that his employees would be paid half salaries. Only the manager, he said, would get fully paid because she had carved a fresh niche for the business without being prompted.
Amid the Coronavirus madness, street gangs – whose sources of income have been cut off – terrorised residents of various parts of Lagos mainland during the week. They wanted money. They wanted food. The people had to take their destinies into their own hands by keeping vigil against them. I fear what will happen when, at the end of the month, workers do not receive bank alerts notifying them of payment of salaries. Bitterness will spread like wild fire and I pray blood do not flow.
In the First World, many employers have informed their employees that they will receive half of their pay for working from home. But there is a difference: governments have come in to make up the losses. In the United States, for example, every tax payer is getting paid some stimulus package. This covers non-citizens; once you are a legal resident and you pay tax, you get paid some dollars to ease the pain of the loss. If you have children, your kids also get about half of what you are paid. Landlords have also been mandated not to harass their tenants over no-payment or late payment of rents. These may not cover all your losses, but you are not left to bear the losses alone.
Nigeria seems handicapped to offer us real reliefs, except the tokenism that is embarrassingly being shared to those described as the vulnerable. But, in the end, it appears we are all vulnerable, especially salary earners who will in the next two weeks begin to receive the shock of their lives when the bank alerts refuse to come or they come with half or quarter of their pay.
In the next few days, we will further appreciate the fact that our world has changed and continues to change; we will realise that we do not know this world again; and with our cash flow dwindling, we will get to look at things from sombre perspectives.
My final take: We have always needed one another; we will need one another more in the days to come. Whatever many have stored will dry up and there will be little or no cash to restock. With our kind of banking system – with a ‘sick’ credit system – there will be no money to get basic needs. A credit card would have made a difference like it is doing for folks in the developed world. https://thenationonlineng.net/salary-earners-will-also-cry/amp/ 84 Likes 11 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Simplyleo: 11:10pm On Apr 20, 2020 |
Perhaps for private organisations.
Before the govt workers will start suffering from unpaid salaries, the matter go don pass be careful. 265 Likes 14 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Ussycool: 11:15pm On Apr 20, 2020 |
That will be too bad for our country. Men will suffer and elites will reposition themselve after this pandemic.
I pray it shouldn't reach that extent. 64 Likes 8 Shares |
Re: Lockdown: Salary Earners Will Also Cry by StephyObodo(f): 11:25pm On Apr 20, 2020 |
God help us! 7 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by Omooba77: 11:28pm On Apr 20, 2020 |
StephyObodo: God help us!
Amen o. A barrel of oil is less than $12 today.... 60 Likes 9 Shares |
Re: Lockdown: Salary Earners Will Also Cry by babyfaceafrica: 11:28pm On Apr 20, 2020 |
Just for a while.. Oil prices will bounce back.. My problem is that we won't learn anything, we will still continue to depend on oil and we will keep looting 273 Likes 17 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Lovelive: 11:34pm On Apr 20, 2020 |
Gvrmt without creativity, we die here. 8 Likes 3 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Lipscomb(m): 11:34pm On Apr 20, 2020 |
Seriously I'm really scaring... Because aftermath of this coronavirus thing's will really hard we shouldn't deceive ourselves we just have to brace up. 52 Likes 4 Shares |
Re: Lockdown: Salary Earners Will Also Cry by GamalNasser: 11:36pm On Apr 20, 2020 |
Simplyleo: Perhaps for private organisations.
Before the govt workers will start suffering from unpaid salaries, the matter ho don pass be careful. For weak Economy like Nigeria the FG can fail to meet salary obligations if this continues for 21 weeks....state govts are already announcing pay cuts 43 Likes 3 Shares |
Re: Lockdown: Salary Earners Will Also Cry by budaatum: 11:54pm On Apr 20, 2020 |
11 Likes |
Re: Lockdown: Salary Earners Will Also Cry by Sunofgod(m): 1:28am On Apr 21, 2020 |
Nice analysis.... 13 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by ITbomb(m): 1:55am On Apr 21, 2020 |
I see naira going on a free fall 13 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by WATCHOVER(m): 1:55am On Apr 21, 2020 |
Op expect money rituals, Money will never dry. This is what you get when you fail to plan, you plan to fail.
Useless rulers.
More deaths to come in Aso Villa 29 Likes 7 Shares |
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Re: Lockdown: Salary Earners Will Also Cry by edgeconsul: 3:35am On Apr 21, 2020 |
Observing 4 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by jchioma: 4:04am On Apr 21, 2020 |
Nigeria seems handicapped to offer us real reliefs, except the tokenism that is embarrassingly being shared to those described as the vulnerable. But, in the end, it appears we are all vulnerable, especially salary earners who will in the next two weeks begin to receive the shock of their lives when the bank alerts refuse to come or they come with half or quarter of their pay. Mostly affected will be those who did not save for the rainy day. However, what is true here is that this world will not remain the same again. Some people may not even have jobs to return to, while some others will bounce back by diversifying and creating new niches for themselves. At the end, only the strong and wise will survive. 102 Likes 7 Shares |
Re: Lockdown: Salary Earners Will Also Cry by seunlayi(m): 4:54am On Apr 21, 2020 |
It will be definitely be tougher, mass sack is already already awaiting many. Many business won't be able to restart, schools will be affected,...... 8 Likes |
Re: Lockdown: Salary Earners Will Also Cry by Nobody: 5:33am On Apr 21, 2020 |
Ussycool: It wouldn't reach that extent. Let's HOPE so, but likely head to such especially for a MONO ECONOMY Countries are not buying CRUDE. ALL vehicles are PARKED. CRUDE is useless now. Most VESSELS with Crude are parked at the warf. Ventilator is more powerful now. FaceMask will start feeding some countries soon. 15 Likes 3 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Nobody: 5:46am On Apr 21, 2020 |
Very good article, and let's be honest things are looking grim.
The problem is, since 2015 we have been saddled with a government that , faced with the warning signs, did nothing to prepare for this, like removing subsides, which would have attracted investment and crucially money for the reserve. Instead, they just continued sharing the national cake.
I hope that this covid 19 crisis teaches us that oil really is a burden, and not a blessing. Oil dependent countries are all going to suffer. Perhaps it will finally be our wake up call to focus on industrial development. 40 Likes 2 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Nobody: 5:47am On Apr 21, 2020 |
As long as you are getting only debits without credits, it's only a matter of time... 14 Likes |
Re: Lockdown: Salary Earners Will Also Cry by Area4Area: 6:31am On Apr 21, 2020 |
GamalNasser:
For weak Economy like Nigeria the FG can fail to meet salary obligations if this continues for 21 weeks....state govts are already announcing pay cuts Pay cuts for the state's workers or which category of workers and which state could that be? 14 Likes 3 Shares |
Re: Lockdown: Salary Earners Will Also Cry by helinues: 6:34am On Apr 21, 2020 |
That's global effects not only Nigeria.
As the price oil fell drastically, countries depending on oil revenue must look elsewhere to fund their budget 4 Likes |
Re: Lockdown: Salary Earners Will Also Cry by Usorohtheman(m): 6:47am On Apr 21, 2020 |
Politicians should bring out all the looted funds. 9 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by Staro: 6:55am On Apr 21, 2020 |
What about the #3 Trillion fresh loan from IMF & World Bank ?
There is money ! The Nations Newspaper is confused
11 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by Tomilola360: 7:16am On Apr 21, 2020 |
Omooba77: I do not intend to scare you but by the time President Muhammadu Buhari speaks to us again to either end the lockdown or extend it, many of us will receive sad news: salaries will not be paid. It will not be because our employers are wicked; it is just that companies are closed and money is not made. Companies that have been operating have not done so at full blast and whatever revenue has been earned is bound to be infinitesimal and incapable of footing bills.
You may wonder why companies will not go into their reserves to cushion the effect of the financial dire strait caused by the pandemic and my response is – many companies in Nigeria are like the Federal Government, with severely depleted reserves, or no reserves at all! They are run based on what I see as ‘run-as-you-go’. If they do not earn money in a particular month, surviving the next month will be like a blind man trying to fix thread into a needle.
Our foreign exchange reserves fell to $34.58 billion on April 7. The reserves had $38.53 billion on January 2. No less than $3.95 billion has been taken away from it in the last three months. Oil price has tumbled to an all-time low and, being a mono-economy, we have no choice than to keep dipping our hands into the reserves. Soon, there may be nothing there again as it is the situation for many businesses in the country. Every government since we returned to democracy in 1999 has been mouthing diversifying the economy, but this has always ended up as mere campaign sloganeering. No concrete effort is discernible along this line.
The terrible shape of our Almighty black gold is captured in the words of Dr Sun Xiansheng, the Secretary-General of International Energy Forum: “The global spread of the Coronavirus is creating a demand shock that is impacting the already fragile world energy market balances. Markets are continuing to assess the yet unknown risks of COVID-19 to the global economy as the disease continues to suppress economic activity.
“Low oil prices combined with the inelastic nature of refined product supply and demand is usually a boon to refining margins. However, COVID-19 also impacts downstream profitability caused by erosion in demand. The combination of sustained shocks to supply and demand will cause product inventories to rise to new highs.”
The country this week joined other Organisation of Petroleum Exporting Countries (OPEC) counterparts to cut 9.7 million barrels of supply to raise price and save countries like Nigeria, which depends on oil cash, from starving.
Minister of State for Petroleum Resources Timipre Sylva said the cut in production would enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term. Good as the expected effect of this decision sounds, its fruit will not be immediate and, even if it is, I do not see it translating into helping stop our tears.
There are fears that the country will soon slip into recession. The last time we went into recession, shortly after Buhari took over the reins of power in 2015, we saw hell. Many companies could not pay salaries for months, and when they eventually started meeting their obligations to their members of staff, it was because investors recapitalised. Recession at a time like this is like jumping from frying pan to fire. But it does not look like we can avert it.
From what I can see, it is not only transporters and others who earn daily money that are crying or will cry, salary earners will soon cry when at the end of the month, it is either they get half-pay or they are not paid at all. An employer told me during the week that his employees would be paid half salaries. Only the manager, he said, would get fully paid because she had carved a fresh niche for the business without being prompted.
Amid the Coronavirus madness, street gangs – whose sources of income have been cut off – terrorised residents of various parts of Lagos mainland during the week. They wanted money. They wanted food. The people had to take their destinies into their own hands by keeping vigil against them. I fear what will happen when, at the end of the month, workers do not receive bank alerts notifying them of payment of salaries. Bitterness will spread like wild fire and I pray blood do not flow.
In the First World, many employers have informed their employees that they will receive half of their pay for working from home. But there is a difference: governments have come in to make up the losses. In the United States, for example, every tax payer is getting paid some stimulus package. This covers non-citizens; once you are a legal resident and you pay tax, you get paid some dollars to ease the pain of the loss. If you have children, your kids also get about half of what you are paid. Landlords have also been mandated not to harass their tenants over no-payment or late payment of rents. These may not cover all your losses, but you are not left to bear the losses alone.
Nigeria seems handicapped to offer us real reliefs, except the tokenism that is embarrassingly being shared to those described as the vulnerable. But, in the end, it appears we are all vulnerable, especially salary earners who will in the next two weeks begin to receive the shock of their lives when the bank alerts refuse to come or they come with half or quarter of their pay.
In the next few days, we will further appreciate the fact that our world has changed and continues to change; we will realise that we do not know this world again; and with our cash flow dwindling, we will get to look at things from sombre perspectives.
My final take: We have always needed one another; we will need one another more in the days to come. Whatever many have stored will dry up and there will be little or no cash to restock. With our kind of banking system – with a ‘sick’ credit system – there will be no money to get basic needs. A credit card would have made a difference like it is doing for folks in the developed world.
https://thenationonlineng.net/salary-earners-will-also-cry/amp/
You wan make dem come for you. I made similar comment on a thread and became the devil for saying the obvious truth 8 Likes |
Re: Lockdown: Salary Earners Will Also Cry by Yohh: 7:33am On Apr 21, 2020 |
GamalNasser:
For weak Economy like Nigeria the FG can fail to meet salary obligations if this continues for 21 weeks....state govts are already announcing pay cuts Haba, which states announced pay cut? 17 Likes 2 Shares |
Re: Lockdown: Salary Earners Will Also Cry by Nobody: 7:39am On Apr 21, 2020 |
Hmm |
Re: Lockdown: Salary Earners Will Also Cry by AntiWailer: 7:56am On Apr 21, 2020 |
It depends.
Some salary earners are able to work very effectively from home.
As a matter of fact, most tech guys earn more this period.
I know Fintechs that pay extra allowance for data and power cos the guys are working from home. 36 Likes 2 Shares |
Re: Lockdown: Salary Earners Will Also Cry by GhostPhoenix(m): 7:57am On Apr 21, 2020 |
Yes na. Everyone is affected
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If you're TB and you need a B, contact as well 2 Likes 1 Share |
Re: Lockdown: Salary Earners Will Also Cry by Martinola(m): 7:57am On Apr 21, 2020 |
The level of our dependence on oil is incredible. Our leaders (past and present) are just too rigid. 5 Likes |
Re: Lockdown: Salary Earners Will Also Cry by PureGoldh(m): 7:57am On Apr 21, 2020 |
No be lie...we just pray and hope hunger no go kill us.
Just incase you need Raw Original Honey..call or Whatsapp 0810 166 67 71 let's talk about it..Stay Safe fam...God wey create birds of the air dey provide for em daily..so shall he make way for us this period and always... 4 Likes 1 Share |
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