It will be recalled that between July and August this year, an estimated 1,800 workers lost their jobs following the collapse of five banks. Prior to this occurrence, two other banks, namely UT Bank and Capital Bank had their licenses withdrawn resulting in the lay-off of 900 employees of these banks following the takeover by GCB bank.
Quite recently, the Bank of Ghana intimated that a couple of banks have written to them about their intentions to merge. It is expected that many more banks will merge in the coming months so as to be able to meet the minimum capital requirement for universal banks in Ghana by close of 2018. These mergers will most likely result in some unavoidable lay-offs.
A couple of labour experts and financial commentators have predicted further job losses particularly in the banking sector. Such predictions largely stem from the official announcement of some up-coming bank mergers such as that between Sahel Sahara Bank and Omnibank, and possibly news about merger talks between GN Bank, Premium Bank and Heritage Bank. There are talks of possible merger between ADB and NIB.
Job losses have not been limited to the banking sector; some job losses have also been recorded in a couple of media houses and companies, some purportedly relating to some of the collapsed banks. It appears there are more lay-offs to follow in the coming weeks and months. This unfortunate trend has given rise to heightened concern among many employers and employees particularly in the banking sector but also in other sectors.
Related: Economic Crises: 8,000 Workers to go Home
Ghana Employers Association (GEA) Speaks
The Ghana Employers Association (GEA) for instance have in a recent interview expressed concern about the possibility of further lay-offs and encouraged government to consider far reaching policy issues that may compel companies to resort to laying off workers as a survival mechanism of sorts.
“As we speak, the business environment is very critical. The question is how do businesses survive and grow in an environment where though inflation is still in a single digit currently at 9.9 percent in August from 9.6 percent in July, the dollar rate is nonetheless creating difficulties for businesses,” GEA’s CEO, Mr. Alex Frimpong stated.
Relating the matter of possible job losses to high interest rates on loans contracted from financial institutions and by extension the depreciation of the Cedi against the US dollar, Mr. Frimpong noted that members of the association are compelled to sometimes contract loans with as much as 30 percent interest rates from banking institutions to run their companies.
“This and many others are the key issues bothering us and it’s not in the interest of companies to dismiss workers, but such could happen when it gets off the limit. GEA members will look at the environment and situate the survival and otherwise of their business and see whether dismissals are a thing to consider,” he explained.
GEA, a body established in 1959 with current membership of 900 members and primarily focuses on promoting and protecting the basic interest of employers has yet another concern that is linked to potential job losses; they are concerned about the influx of both counterfeit and substandard products into the Ghanaian market from both approved and unapproved border posts. They are of the view that should the relevant state agencies fail to check this trend and nib it in the bud, it will spell doom for some businesses in Ghana and possibly lead to many more job losses.
The GEA has also disclosed its intention to engage the relevant state agencies concerning major policy issues which stifles the growth of Ghanaian businesses. The idea is to push for business-friendly policies. They see this as one of the prudent measures that will significantly stem the tide of mass job losses that has become all too common in recent times.
“We are preparing discussions with the Trade Ministry concerning the influx of counterfeit goods. We’ll approach the Finance Ministry on the micro-economic management and the BoG which controls the banking environment. The conversation will be escalated beyond the Employment Ministry,” Mr Frimpong maintained.
