Job losses loom in tourism industry as economic downturn worsens

NIGERIA - Thousands of workers employed by hotels and tourism firms across the Nigeria may lose their jobs following the worsening economic downturn, foreign exchange crisis and a sharp rise in the cost of power generation.

With hundreds of thousands of workers in the hotel and tourism business, the hospitality sector is one of the highest employers of labour in Nigeria.

Speaking to journalists in Lagos on Wednesday, Managing Director/Chief Executive Officer, Blueseasons Hotels & Suites Limited, Michael Anyanwu said “most of these jobs are hanging in a balance” due to  looming massive sack in the sector.

Anyanwu has therefore called on government to quickly fix power generation crisis in order to avert massive retrenchment.

According to him, the huge amount of money spent on diesel and power generation could be saved to sustain the workforce if government acts fast to solve electricity crisis.

He said: "Scarcity of dollars has impacted negatively on the industry. Foreigners can't come and do businesses in the country as a result of dollar scarcity as they are not sure of capital/dividends repatriation.

Also exchange rate of dollar to the naira is not favourable to importers any more.

In fact, most of the ocean liners had to cancel or reschedule their Vessel itinerary into the country as the liners are almost without cargo. Most of them are no more doing businesses let alone taking time off to rest.

So demand has dropped sharply, while the supply side can only be upward flexible and every aspect of the economy is affected. It is a very big challenge that we are into because few people can scarcely afford the basic needs not to talk of relaxation today."

He explained that since his hotel located in Aguda Surulere area of Lagos, opened for business this year, he has been running on power generators at an average cost of N850,000 per month excluding maintenance.

He expressed the regret that despite the huge cost he incurred on generating power, he still pays huge amount of money on electricity monthly even as power supply dropped sharply in the area.

He expressed fears that if electricity tariff increase gets implemented, the huge additional cost would bring more burden on operators in the industry where 24-hour power generation goes on non-stop.

He advised government to work hard to encourage exports to improve its dollar earnings and grow foreign reserves, stressing that as foreign reserves grow, naira value will appreciate against the Dollar and other foreign currencies.

He added: "Government has a lot to do to improve the economy. One of the things government must do to strengthen the naira is to explore non-oil revenue. Government should begin to tap solid minerals deposits to earn more revenue. 

It is anticipated that the Government can earn additional USD20bn yearly from mining, which will help to improve our dwindling external reserves.

"Also government should relax some of their monetary policies on foreign exchange management. Most of the things we consume in the country are imported.

Part of our predicament is that we are an import dependent nation; we cannot afford to shut down our import windows overnight. In fact our government should begin to realize that to a reasonable extent that there is nothing like backward integration.

"Rather, the authorities should create a level playing field for importers and create more jobs and revenue from it. Those whose businesses thrive on imports need to have access to hard currency if they must remain in business.

For the Hospitality Industry, we also expect the government to create an intervention fund as they have done in other sectors like aviation, agriculture and so on."

February 12, 2016; http://www.thisdaylive.com/articles/massive-job-losses-loom-in-tourism-industry-as-economic-downturn-worsens/231713/