The reasons are primarily based on the poor wage incentives to workers . A man can work for this group of investors all his life without any financial gain in his life or for those around him. If the greater percentage of Nigerians and Africans in general are subjected to this work environment, in the long run Nigeria will be made up of poorer people.
If, at the age of 30 years, Mr A, a fresh graduate in Petroleum Engineering gains employment in an underpaying firm, say with a monthly pay of about 50,000 Naira (about US $ 400), and his colleague, Mr B, gets a job with a high-paying company in the same industry at the rate of 200,000 Naira (about US $ 1600), there will be a significant difference between them.
Let us consider that these two face the same market and economic factors as below:
Market Purchases
Consumables: 1.2
Clothing: 0.2
Others: 0.1
Assets
Housing: 0.5
Car / Transportation: 0.5
Dependability: 0.2
Security and welfare: 0.1
TOTAL: 2.8 units of their monthly income
An analysis of the usage of their incomes follows:
Mr. A earns about 50,000 Naira per month. 2.8 of 50k = 17,857 Naira (This is the spendable amount.)
Less the Naira value of 2.8 units from the monthly pay = 32,143 Naira (Reserve)
Mr. B earns 200,000 per month. 2.8 units = 71,428 Naira (This is the spendable amount)
Less Naira value of 2.8 units from his monthly pay = 128, 571 Naira (Reserve)
Before the age of 50 years
Mr A’s reserve = 7.7 million Naira
Mr B’s reserve = 30.85 million Naira
From the analysis it is clear that Mr. B has better control and stability in finance. If every average worker in the country worked for Mr. B’s type of company there would be reduced inflation and unemployment, a high Gross Domestic Product because of the re-investment of the reserve. These would give a more stable economy and people, which would, in turn, be good for governance. It is very important that the governments of Nigeria and other developing countries call in investors that are people-progress oriented.
Now the Department of Petroleum Resources of NNPC is opening talks with China and India to explore the possibilities of establishing refineries in the Niger Delta area. My candid advice in that regard is to stop such talks, and to call in the major oil firms (strong investors) to do the refineries. Otherwise, we will usher in another era of crisis due to underpayment of employees and other unprofessional issues. These will eventually lead to the dragging down of the economy.
Today the food and beverage industry, to which I belong, is impoverished due to the underpayment of workers in the sector. For 17 years I have worked in this sector but still do not have a house of my own. There are many more like me, and there is nothing sentimental about it.
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