Kaduna strike will cost huge economic losses

The ongoing five-day warning strike by labour unions in Kaduna State will cost the state huge economic losses, a university don has warned.

Terhemba Wuam, a professor of Economic History at Kaduna State University, gave the warning in an interview with the News Agency of Nigeria (NAN) in Kaduna.

He said the poor masses would be left to bear the burden.

NAN recalls that the Nigerian Labour Congress (NLC) on Monday began a five-day warning strike over a plan to sack civil servants by the state government.

The strike, which entered day three on Wednesday, had crippled economic activities in the state with the government and business owners counting their losses.

According to the professor, the suspension of electricity supply, closures of petrol stations and the shutdown of economic activities will have huge economic consequences for the government and the people.

“The state government says it is rightsizing its civil service so as not to be spending a larger portion of its money on civil servants.

“Labour, on the other hand, is saying, ‘do not sack our members in the name of right sizing’.

“While both are right in their arguments, there is something both parties are missing in this unending debate – the strategic role of recurrent expenditure in the development of the state.”

He said the labour unions failed to put up an argument that when the government pay salaries, “it is not only the civil servants that consume what the state gets from the federation account.”

Mr Wuam explained that when the government pays salaries, it workers use the money in training millions of children in primary, secondary and tertiary institutions, critical in human capital development.

“The labour union should tell the government that it is the money they earn as salaries that service half of the state in terms of ensuring that education, health and other government services are delivered.

“Both labour unions and the government are missing this point,” he said.

The lecturer further pointed out the overwhelming emphasis on the importance of capital projects, stressing, however, that recurrent expenditure could even be more important.

He noted that although capital projects might provide the buildings, the roads and other infrastructure, at the level of the country’s growth and development, the multiplier effect might be limited.

“For example, when you pay a Chinese company N10 billion for capital projects executed, that money goes to China.

“But if you pay Kaduna State civil servants that N10 billion, they train your citizens, provide health services to the citizens, collect taxes and the money is retained within the economy.

“The government has its valid point, but the labour unions have to make the government understand, through dialogue, that what they are fighting for will contribute to the state’s development agenda,” he said.

Mr Wuam advised the state government and the labour unions to consider going to the negotiating table as fast as possible as a better option in the interest of both parties and residents of the state.

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He said the most important thing at this point was for both parties to reach a middle ground so that what they were fighting for would be for the development of Kaduna State.

The economic historian further stressed the need for a rethink around the economy.

He said that considering the level of states and federal governments’ financial obligations, simply downsizing or managing the “national cake” as it was would no longer be sufficient.

According to him, economic productivity will have to be doubled within a decade or stand the risk of total collapse.