Several workers in Nigerian banks are exiting the country, worsening the country’s brain drain crisis and raising training costs for Nigeria’s financial institutions, a new report by Bloomberg has disclosed.
The widespread brain drain from Africa’s most populous
country — popularly known as “japa”, which means “to run swiftly out of a bad
situation” in the Yoruba language — is having a devastating effect on the
financial sector, the report said.
Banks, already suffering from rising interest rates, higher
operating expenses and threats of a spike in non-performing loans, are being
forced to increase spending on training and recruiting, and in many cases lower
their standards for new hires, it stated.
Better schools, higher salaries and more fringe benefits
abroad, combined with a lack of local job security, is pushing mid- and
early-career employees abroad, it quoted a report released this month by the
Chartered Institute of Bankers of Nigeria (CIBN) as saying.
Africa’s biggest economy has suffered through two recessions
in the last six years. Soaring inflation, which hit a 17-year high of 20.5 per
cent in August, has eroded household purchasing power and shrunk local currency
salaries.
So skilled workers are turning to big western economies,
where other Nigerians have built successful lives, particularly Canada, the
United States and the United Kingdom, the report stressed.
The number of Nigerians who received UK work visas,
Bloomberg said, rose to 15,772 for the year through June, from 3,918 in the
year through December 2019, the last full year prior to the pandemic, quoting a
report by the UK Home Office released last month.
Last week, Moody’s warned that higher inflation and interest
rates could see non-performing loan rates at Nigerian lenders spike. But for
the banks, the concern over asset quality is currently being overshadowed by
employee flight.
“It is a reality and we are just ensuring that we are
recruiting more than are leaving,” Chief Executive Officer of Access Bank Plc,
Nigeria’s biggest bank by assets, Roosevelt Ogbonna, told Bloomberg by phone,
without saying how many employees had left.
In a bid to fill the gaps, bankers are spending more time
“training the existing workforce and equipping new graduates,” which may entail
lowering the entry standards at some point, said Abubakar Suleiman, Chief
Executive at mid-size lender, Sterling Bank Plc.
“The opportunity is to hire smarter, train better and make
banking more responsive to fill the vacancies,” he added.
The bankers’ union recommended offering remote work and
modelling “the work patterns and the work conditions of their staff against
global practices.”
Ogbonna said Access Bank was looking beyond salary to create
an environment that is “inclusive and conducive” to retain its workers, without
elaborating.
In an interview, Francis Eze, a respondent said he spent
nearly a decade at one of Nigeria’s biggest banks working for a salary far
lower than the one he’d negotiated in his interview with the financial
institution.
As a bachelor and then as a newlywed, he found a way to
manage on a tighter budget, he added.
“His wife, a nurse, had long told him about colleagues at
her hospital who had been recruited to move abroad but Eze wasn’t interested.
Then with private school fees for two children coming due this year, the pair
joined the flood of skilled Nigerians leaving the country amid a plummeting
naira and a stagnating economy,” the report added.
“I realised how insufficient the money was to take care of a
family of four,” Eze, 38, said by phone from Toronto, where his family
relocated in January. “I told my wife we should do as others were doing,” he
told the news medium.
Eze, who works for a food company in Canada, said ultimately
it will come down to money.
“Unless you have good work conditions, including salary that
can cover your cost and you also make some savings, even if a little, you’ll be
thinking of where to run to,” he said.