MWUN strike: Effect on the Nigerian economy

Segun Oladipupo

The Federal Government has reportedly lost over N130 billion to the suspended Maritime Workers’ Union of Nigeria (MWUN) strike which lasted for three days.

The estimation which did not include other ancillary services, no doubt had several negative effects on the economy.

No amount can be bandied to the loss incurred by other operators like truck operators, freight forwarders, Shipping companies, other service providers operating in the port arena.

Ironically, the only beneficiaries of the three-day old strike are the terminal operators who made fortunes from slamming demurrage charges on all trapped containers and goods in the ports while the government and Nigerians are at the losing end.

On the other hand, since there was no moving in or out of the port for vehicles, loaded perishable items and raw materials trapped in the port ended up not getting to their destinations early enough, hence loss of wealth.

A financial analyst stated that the economic paralysis for three days had chain effects on the economy even as he maintained that if it had lingered longer than the three days, it could have engendered inflation in the country.

Mr. Johnson Chukwu, Managing Director, Cowry Assets Management Limited stated that quick intervention by the ministries of Transportation and Labour & Productivity was a saving grace.

Chukwu stated that largest quantity of goods that come and go out of the country do so through the ports.

He maintained that some of such goods must have been trapped in the ports for the number of days that the strike lasted thereby leading to demurrage accrual.

To him, the demurrage could lead to increase in market price of the goods.

He added that raw materials and perishable goods would be at the receiving end because they will not be able to exit the port.

Asked how much the strike could have cost the economy since it started, he said it could be difficult to quantify the loss incurred from the strike without a thorough evaluation.

“Since the Maritime has the largest share of goods that come and go out of the port, it will have a negative or severe effect on our economy.

“It will also lead to loss of man hour; it could lead to inflation, loss of jobs for those in hourly or daily employment.

“Foreign vessels will not be able to berth and discharge and that will lead to increase in demurrage.

However, the pertinent question on the lips of Nigerians is why did it take the ministries so long before intervening?

If the ministries had what it takes to summon the International Oil Companies (IOCs) to a meeting or broker truce between the two warring parties, why was the action not taken earlier to avoid the damage on the economy?

As it is, the negotiation is still on between the intervening ministries, MDAs and the striking labourers. Failure to reach any formal agreement, the service withdrawal by the Labour workers could resume and it may assume a more total dimension.

This time around, it may be more devastating than the first experience hence, the need for the government to wade in and broker truce to avoid more damage to the already precarious economy.