Nigeria’s fragile economy took a hit on Monday after a nationwide strike by labour unions led to the shutdown of the electricity grid, cancellation of flights, blockade at seaports and a disruption of banking activities.
The strike, led by the two biggest labour federations- the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC), is a protest against the government’s refusal to raise the minimum wage by more than ten-folds to N494,000 from the current N30,000. The government offered to double the amount but the unions resisted, making good a threat to shut down economic activity across the country.
National grid shutdown
Nigerians were plunged into fresh blackouts due to the shutdown of the national grid by the unions. The grid dropped to zero megawatts on Monday, cutting off power to all eleven electricity distribution companies in the country.
“I’m worried because the state of the healthcare system is on the verge of collapse,” said Olusina Ajidahun, a doctor at a Lagos-based hospital. “The emergency unit and everywhere was dark. Patients and healthcare workers were all in darkness.”
The Transmission Company of Nigeria (TCN) reported that operators were forcibly removed from control rooms by union workers. Photos on social media showed cane-wielding union members ordering personnel from the country’s tax agency out of their offices.
The shutdown also forced power generating stations to shut down units, causing high frequency and system instability, which eventually shut down the grid in the early hours of the day.
The strike follows failed negotiations with the government to not only raise the federal minimum wage but also protest against recent electricity tariff hikes.
Demurrage and storage charges pile as cargo clearing stalls
Demurrage and storage charges piled up on goods trapped at the ports over the inability of cargo owners to clear goods from the ports following the strike by the Maritime Workers Union in compliance with the directive of the NLC.
Port workers, Customs Licensed Agents, freight forwarders, and truck drivers were denied entry into the Apapa port in Lagos.
The disruption of activities at the nation’s seaports left many businesses counting losses.
According to port users, shipping companies and terminal operators will impose charges on cargoes trapped at the ports despite the strike not being the fault of cargo owners.
“Shipping lines and terminal operators would not have mercy on Nigerian businesses after the strike because people would be forced to pay for their inability to take delivery of their consignment as and when due,” Tony Anakebe, managing director of Goldlink Investment Ltd, told BusinessDay.
He said officers of the Nigeria Customs Services and other government agencies involved in cargo clearing at the port were also not available to carry out container examination as supposed or release already cleared goods.
Pointing out that banks were also not open for business while those opened were operating skeletal services, he said his company was not able to pay import duty for the container they were clearing at the port.
Shipping lines collect as much as N58,000 and N65,000 for 20-foot-container and 40-foot containers per day, and if multiplied by thousands of containers that are evacuated from the port daily, it would amount to millions of naira in losses.
Sandra Omo, another clearing agent, told our correspondent that agents were denied access to Tin-Can and PTML ports where she operates.
According to her, the situation would impose serious costs on importers, who would lose millions of naira to the high cost of doing business associated with the payment of demurrage and storage charges to shipping companies and terminal operators.
She called on the government and the Labour unions to agree to reduce pressure on businesses that would bear the brunt of the strike.
“The cost of doing business in the port is already high due to the high tariff importers are paying as a result of the high exchange rate of naira to dollar and volatile exchange for paying Customs duties. Therefore, adding extra unavoidable demurrage and storage charges to the cost would put more pressure on businesses,” she said.
BusinessDay findings show that Tin-Can Island Port, Onne, and Rivers Ports in Rivers State were all shut down on Monday due to the strike.
On the extent of the strike, Ibrahim Ohize, president of the Dockworkers branch of MWUN, said vessels are not allowed to berth and no trucks are permitted to go in or leave the port.
“The strike is ongoing and it is indefinite, affecting all ports in the country including Warri, Port Harcourt, and Onne,” he said.
Meanwhile, Yusuf Liadi, a truck owner, said that cargo-laden trucks and trucks returning empty containers are not allowed to access and exit the Lagos Port.
According to Liadi, containers are trapped at the port gate while drivers have parked the trucks till the gate is opened for them to access and exit the Lagos port.
Businesses suffer, and passengers are stranded at airports
Businesses around the airports that are directly and indirectly linked to the aviation sector on Monday were also grounded as a result of the indefinite strike action.
Aviation fuel tankers, stores at the airport, catering outfits and logistics companies conveying goods to various airports, amongst others, were forced to close shop as passengers were barred from entering the airport.
Passengers who had planned to board flights to different destinations were barred from boarding the flights as aviation unions locked the entrance gates to the domestic terminal of the Lagos airport.
Airlines scheduled to take off from Lagos and Abuja airports were denied access to the terminals, thereby crippling flight operations.
BusinessDay’s checks show that hajj operations currently ongoing nationwide were also affected by the strike action.
Peter Ugwu, a passenger who was supposed to be on an 8:00 am flight from Lagos to Abuja for a professional exam, told BusinessDay that he had missed the opportunity and would have to cancel the trip since the exam was supposed to be at 11 am.
Ikenna Cheta, a logistics personnel said all perishables he was supposed to send to the airport on Monday morning could not be transported to the terminal because access gates to the airports were closed.
Cheta said he would be forced to pay for some of the perishables because some customers may not understand the situation and may want a refund for services paid for.
Taxi drivers around the airport also complained to BusinessDay that they have not been able to work because passengers suspended their travel plans after they learnt that flights were being cancelled as a result of the strike.
Stores and food outlets across the airport terminals also suffered losses as passengers who had been deprived from entering the airports were unable to buy food or items from stores at the airport.
Unions carrying placards and banners were stationed around the domestic terminals in large numbers to press home their demand.
BusinessDay’s findings show that the situation at the Abuja airport mirrors that of Lagos, as unions barricaded the terminal entrances. Travellers were advised to return home, awaiting a resolution between organised labour and the Federal Government.
United Nigeria Airlines disclosed in a statement that none of its scheduled flights hhasbeen permitted to depart the airport significantly affecting its services and operations.
Ibom Air also said it was unable to dispatch any of its scheduled flights because of the strike action.
Air Peace through its X handle stated that it was only able to operate its regional and international flights and all local flights were grounded as a result of the strike action.
George Akume, Secretary to the Government of the Federation, called a meeting with the leadership of the Organised Labour late Monday with the outcome unknown as of the time of filing this report.
Hajj subsidy, luxury SUVs “poisoned” negotiations – Peterside
Atedo Peterside, founder of Stanbic IBTC Bank Plc, said the government’s lavish spending was a major obstacle in the minimum wage negotiations between the government and labour unions.
According to him, the government’s “reckless” spending habits have created an unrealistic perception of its financial health.
“The Nigerian minimum wage negotiations were destined to be unnecessarily difficult because the federal government poisoned the well for responsible negotiations by approving an irresponsible N90 billion for legislators and others, creating the false impression that they were awash in cash,” Peterside wrote on X.