Implications of Offshoring ICT/Telecommunication Jobs by Operators in Nigeria

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The bourgeoisie everywhere in the world is mainly concerned about continuous lowering of cost of production in order to maximise profit. In their drive for this maximization of profit they adopt various methods sinister or not to ensure their goal is achieved. One of such methods is what is termed OFFSHORING.

Offshoring is simply about sending work abroad that hitherto done locally. According to Dean Davison of Meta Group research, offshoring is growing 20 per cent to 25 per cent per annum, with little evidence of slowing.

Though, offshoring is a fast growing method adopted by companies all over the world including in the developed countries especially the United States of America but the devastating effects it has on the countries losing the jobs is a cause for concern, even in the USA.

As a matter of fact, in reaction to offshoring, products produced by companies that engage in it are boycotted by the people/citizens. This is an indication that offshoring is not the best practice as the proponents may want us to believe.

Sadly, this monster of a practice is creeping into Nigeria at this critical time that the country is facing its worse economic situation in decades.

The first point of call of offshoring is in the telecommunications sector of the economy with the sack of over 160 workers by the second largest employer of telecommunications professionals- Ericsson- as reported by Punch Newspaper on 1st December, 2016. A source in the company claimed this exercise was in its first phase of implementation.  What this simply means is that when the plan is finalized, not less than a total of 1000 workers would become  unemployed.

Evidence at our (Private Telecommunications and Communications Senior Staff of Nigeria, PTECSSAN) disposal shows that Huawei Technologies Nigeria Limited, the largest telecommunications professional employer in the country, has begun its own process of offshoring to India just like Ericsson, with a resulting effect, when fully implemented, of more than 2,000 employees thrown into unemployment.

In total, a combined number of over 3,000 employees from these two companies will be thrown out of their jobs within the next couple of months.

Consequences of Offshoring;

According to Dr. Paul Craig Roberts, he, Dr. Herman Daly, a former World Bank economist and professor at the University of Maryland, Dr. Charles McMillion, a Washington DC economic consultant, and Dr. Ralph Gomory, a distinguished mathematician and the world’s best trade theorist, “understand that it is strictly impossible for an economy to be moved offshore and for the country with the offshored economy to remain prosperous.” Speaking in the same vein, he claimed, “in March 2011, Michael Spence, a Nobel prize-winning economist and Sandile Hlatshwayo, a researcher at New York University, the two economists, have taken a careful empirical look at jobs offshoring and concluded that it has ruined the income and employment prospects for most Americans.”

Unemployment

As shown above with the developments in both Ericson and Huawei Technologies Nigeria Limited, offshoring leads to loss of jobs in the country. If not checked and it is adopted by other sectors of the economy the rate of unemployment will be so alarmingly high.

Reduced Revenue for the Government

While it is true that bulk of the revenue generated in the sector comes from tax paid by the operators themselves, the tax paid by the employees can not be over emphasised. Income tax of over 3,000 employees in the sector working in Huawei and Erickson will no longer be available as the workers will no longer be on the job. Same can be said of Contributory Pension Scheme in the country, when workers are no longer in service the funds usually contributed thereto will no longer be available, hence, investment used from the funds will become reduced drastically.

Sabotage and Security Concern There is a saying that an hungry man is an angry man. Likewise, there is another that goes, “an idle hand is workshop for the devil”. With thousands of employees to be laid off because of offshoring it cannot be ruled out that a fraction of them may be lured into crime to survive and or come back to hurt their former employers. If latter should be the case, the National Telecommunications Infrastructure in the country will be at a great risk of destruction. It is worth noting that terrorism and militancy as currently experienced in the country blossom, as argued in some quarters, as a result of high rate of unemployment and poverty, hence, if these sacked or to be sacked workers choose to sabotage telecommunications infrastructure in the country the resultant devastating effects of their actions will be far worse than sabotage on oil pipelines by the militants.

Knowledge Gap/Loss

One other effect of the offshoring is knowledge gap between these two countries (Nigeria and India) in offshoring. Despite the fact that we have Nigerians employed in the sector, majority of the advanced technical jobs have always been taken up by the foreigners. Rather than adopt a knowledge transfer model, they simply bring in expatriates to do the job without knowledge sharing. What this implies is that there is so much knowledge gap between foreigners and Nigerians who are on the same job not to talk of now that offshoring is being implemented. It therefore means that over the next couple of years, Nigeria will lack the intellectual manpower needed in Telecommunication Sector.

National Security Risk

With the NOC off all the major operators in Nigeria being taken outside the country, specifically speaking, India, it places the Nigerian Telecommunications space at a great risk as network sites/calls in Nigeria is monitored outside. Also, it exposes Nigerians to great cyber risks which include; data/identity theft, sabotage, loss of control of the operations in the sectors by Nigerians and the government, exposure of financial sector to outside penetration (remember our financial institutions rides on the services of the telecommunication service providers), call eavesdropping, DOS attacks and, ultimately, the networks in Nigeria can be shutdown remotely outside of Nigeria. This development may also jeopardize the ongoing war on terrorism in the country as it exposes the Nigerian military to eavesdropping from outside Nigeria.

Succinctly put: as companies offshore their productions for Nigeria consumer markets, they are simultaneously offshoring Nigeria GDP, Nigeria tax base, Nigeria income and irreplaceable career opportunities for Nigerian citizens.

Recommendations

We propose that all hands must be on deck to achieve

  • Total stoppage of the offshoring exercise
  • Recall of already sacked employees affected by the exercise
  • Security risk assessment of the industry be carried out.
  • Expatriates quota of foreigners working in the industry be reviewed.
  • Illegal Chinese and India Immigrants working in the sector be deported forthwith.
  • Strengthening of relevant industrial laws to protect and secure jobs for locals

 

Comrade Okonu Abdullahi A.

Ag. General Secretary of Private Telecommunications and Communications Senior Staff Association of Nigeria (PTECSSAN).

ptecssannigeria@gmail.com

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