The logistics sector of the economy had it rough during the lockdown caused by the COVID-19 pandemic. GABRIEL OGUNJOBI examines this important sector and its tough times
The struggle to retain a job is what mid-thirty Anthony Enang is confronted with. For the next three months starting from June, he won’t be expecting a salary but may earn peanuts if he meets up with his target.
‘If our delivery is impressive, they will sign a permanent contract with us’, he says about this work, following the merger formed by his original company, Gather Africa with Jumia Food in May ending.
‘The agreement is to work for the next three months but it won’t be on salary-basis, apart from the incentives over the revenue generated during work.’
Jumia Food is one of the subsidiaries of Jumia, Africa’s online marketplace for electronic, fashion, food and grocery among other essential commodities.
In front of Domino’s Pizza restaurant at Gbagada bus-stop on June 2, Anthony is not alone there. Alongside his colleagues working for diverse logistics firms in Lagos, they chit-chat whilst waiting for their next food order.
Next to Anthony is Adekunle Tolu. He is one of the three riders working for Florence Logistics, a small-scale firm that also merged with the same Jumia Food. Tolu may have resigned to fate that earning N40,000 is commensurate to what any dispatch rider would earn in Lagos but what still worries him is job security.
‘The salary is fine. It’s just that the company is a one-man business a friend introduced me to. He can decide to do anything at any time’, he says succinctly.
Uncertain deals: from Oride, Gokada to Merger-Logistics firms
Lurked with similar uncertainty is Stephen Alex, an employer of TQM Haul Logistics. Before Alex’s phone starts to beep intermittently as a signal for awaiting orders, a chunk of his grouch was over the ban of motorcycle hailing operations in February.
In the last two years, Lagos, the commercial nerve of Nigeria, has become attractive to motor-hailing foreign investment because of her bustling economy and rich population. The National Bureau of Statistics puts the population at 16 million.
In order to ensure the safety and security of commuters, the authorities under the Governor Babajide Sanwo-Olu, however, restricted movement of motorcycles from the highbrow areas and expressways. So, the market automatically crumbled for the logistics firms like Gokada, Oride, and Max.ng that relied on mobility.
Thousands of riders lost their jobs as soon as the policy was enforced. Alex, who used to work for Gokada, relives his regrets before settling for a rather unfavorable contract at a merger firm.
His exact words are: ‘They said they want to ensure safety and security but could have done so without making us lose our jobs.’
In furtherance, he says ‘they could have checked the accident record of these companies and retain as many of their staff with little or no accident record. I, for one, never had any accident throughout.’
‘If it is for security, Lagos government can even use riders (through the phone apps we use for tracking) as tools to ensure security of the people.’
After sack from Oride, Anthony’s deal, for now, is non-salary probation while Stephen’s monthly remuneration is N45,000 with no extra benefit. The latter adds that with his old employer, he could make up to N100,000 before the month ends.
Apparently, the government’s new policy subdued their revenue but working for Jumia’s mergers is their closest option for them in the logistics sector. Why? Because Lagos, the epicenter of COVID-19, Ogun state and Abuja, the nation’s capital, were forced to shut down the economy for six weeks in the first instance so as to flatten the curve of the virus. A few logistics firms like Jumia, DHL, and GIGL were granted waiver because of their essential services such as haulage, home food delivery e.t.c.
In the end, Stephen and Anthony, wished they could return to their old employers but it’s a dead horse wish.
For instance, Opay, the fintech that owns Oride, has now suspended its operations across Nigeria, stating COVID-19 and the government’s ban in Lagos as the major reasons.
“We can confirm that some of our business units including the ride-hailing services ORide, OCar as well as our logistics service OExpress will be put on pause. This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown, and government ban.’, the company’s statement on June 2nd, 2020.
David Lewis (not real name) suddenly becomes irritant on Monday morning. Inviting Damilola Douglas (not real name), another co-worker into his mood, both nag for the next 15 minutes about the new policy on work resumption seeming to be overbearing to the duo.
According to the latest correspondence transmitted via email, they will now resume work by 6 am and close by 7 p.m. A total of 13 hours in a day, 65 hours in a week (excluding weekends) and an average of 260 hours is what qualifies him to earn a salary of 48% eventually – a 52 % cut in salary that happened in the middle of the pandemic.
For service centers and Gateway Assistants, it is a 50 percent slash while for the Head Office and Management Staff, the slash is 52 % as well. Added to the daily risk of infection these essential workers bear while interacting with people and unsafe goods, they are aggrieved by the overall welfare.
By the time David and Damilola are done adding up the figures in their heads, they couldn’t come to terms with the pittance. Both of them chorus ‘…and we are even making double of what used to make before COVID-19 started.’ They promised to protest.
The email they all received added that ‘it is impossible to pay salaries when little revenue is generated as against the near-normal cost of running operations.’
A source close to this newspaper and privy to the company’s monthly earning confirmed that a sum of N2.9 million had been realized as at Monday, June 21 in one of the terminals. According to the source, the terminal that accrued an average of N1.5 million before the pandemic.
In another, N3.2 million had been realized as against the usual 2.5 million before the lockdown.
It was also confirmed that at least ten of over twenty GIGL’s terminals in Lagos were fully operational during the six-week lockdown.
The double-margin in figures for money made in June alone buttressed the notion by David and Damilola about the company, a justification for their demand of full salary.
The protest, as these aggrieved staff planned to have, is now becoming a new order.
Before lockdown, a dispatch rider earns an average of N45,000 per month. In April, salaries of these riders and captains (vehicle drivers) – often seen crisscrossing faraway locations like Ikorodu in Lagos mainland and Island and Lekki Pennisula or Epe, or even Ogun state into Ibafo – Mowe – were slashed by 50 percent. They protested and it was reversed by 25 percent for the month of April and then outrightly stopped the following months.
‘After expressing our grievances that day, they knew we were not joking. The COO was also around that day. He begged us and promised to do something about it. By the next day, they had reversed 25 % of the initial deduction’, Segun Adeola mentioned.
‘A scape-goat and the hard-knock’
Akinkunmi Ezekiel (not real name) is not only looking at the salary cut. To him, it’s a rollercoaster of unfair judgment dotted by inconsistent standards.
In brief, he had mistakenly sold goods and will now have to pay through his nose. He still won’t leave the job except a miracle happens to him.
‘When GIGL just introduced the biometrics for checking in and out, I have suffered a whole month without a dime as salary’ he says in the motion to premise his long talk.
‘According to the biometric, they said I didn’t come to work throughout that month. How is that even possible?’, he questions rhetorically.
In continuation of his narration, he tugs his hand into his right pocket to draw out his smartphone. From his mailbox is a surcharge for a mistake made on the goods billing for a customer in June.
If the company makes good the threat of the surcharge, borrowing is his only option to survive through July and he is used to that, by the way.
But, he faults the company’s decision on two grounds: gap in communication and unfair standard.
‘It is a double standard. I know somebody this same thing has happened to before in another branch and never faced this same deduction. ‘This is injustice but no choice for now since I don’t have another job.’
Even if he had mistakenly billed the customer, he explained that protocol permits that he should be contacted in the earliest time possible to allow him to transmit the mistake in the transaction to the customer and ask to add a remainder of money before delivery to the destination but that never happened.’
Nonetheless, Ezekiel offered that GIGL should create a complaint box for seamless communication and towards receiving feedback between employees and employers. Email correspondence is too stringent in his own perspective.
Attempts to seek comment from the Chief Operating Officer of GIG, Adenaike Ayodele, about the general welfare of their staff, were abortive.
When this reporter visited the headquarters ’ office at Gbagada on July 2, the security officer, a middle-aged man identified as Bemil, relayed the COO’s response that he should be reached via an email he gave the reporter.
As at press time, he is yet to reply to the email dated July 3rd.
Meanwhile, while this reporter was carrying out fact-checking to confirm the latest, the company though didn’t refund the arrears from the slashed salaries of the last two months but had now paid the full salary for June.
‘My fear is that GIGL can still cut it and make it permanent’, one of their staff speaking in confidence, however, expressed.
How Lagos can maximise wealth of logistics
COVID-19 has made many unemployed but the grim realities for the essential workers may pass for underemployment and nothing assures of job security.
An expert, Taiwo Oyedele, the Fiscal Policy Partner and West Africa Tax Leader at Pricewaterhouse Coopers, PwC, says despite the realities COVID-19 had enforced on Nigeria as a whole, Lagos state can still harness the potentials of the investors in the logistics sectors for wealth creation if good policies are in place.
He opined that: ‘First, I do not think it’ll be fair to heavily tax these logistics companies because some of them were in operations during the COVID-19 lockdown. Generally, the business has not yet become so profitable in Nigeria but the good thing is that they are filling a vacuum of unemployment in Lagos state.’
‘While some of these companies in the informal sector are not registered for taxation, the government should encourage their registration so that there can be good data.’
Data, he said, would help the state have ‘a comprehensive tax regulation reform which will ensure everyone pays their dues based on what they earn.’
‘This is not only applicable to the logistics but other sectors of the economy. For example, Nigeria made just 1.3 trillion last year on personal income tax throughout last year while South Africa with less than 1/3 of our population and comparative unemployment rate made at least 11 trillion the same year.
‘This means there’s a problem with our system that must be dealt with in a holistic manner.’
Mr. Oyedele, however, differed from the Lagos state government’s policy that restricted the operation of the bike-hailing businesses.
‘Rather than ban the operations of the organized riders like Gokada and the rest of them that employ the use of technology, what the government should have done is to work with them to tighten any loose ends and make them become world-class standard.
‘I think the restriction is a bad omen and it passes a wrong signal to investors who are using their hard-earned money to create more wealth’, the tax expert submitted.
Meanwhile, Nigeria has been rated the poverty capital of the world with an estimated 87 million people living on less than $2 a day threshold.
According to the World Poverty Clock, Nigeria is the world’s poverty capital with 87 million living under the threshold of $2 per day, Aside from this, the latest unemployment report by the National Bureau of Statistics (NBS) also ranked the country 21st of about 23.1% among 181 countries with the highest unemployment rate.
Oil, the country’s mainstay, is currently below US$30 at the global market and even projected to dip further at this time, going by the price war among key players in the industry. Therefore, Nigeria has an urgent need to diversify her sources of revenue to sectors like agriculture, manufacturing and services less affected by the pandemic.
- This report was facilitated by the Wole Soyinka Centre for Investigative Journalism (WSCIJ) under its COVID-19 Reality Check project.