ABCON advises FG against increasing retirement age of workers, says it’ll aggravate youth unemployment

The Association of Bureaux De Change Operators of Nigeria (ABCON) has come against increasing the retirement age of civil servants, stressing that it would aggravate youth unemployment in the country.

The association stated this in its Quarterly Economic Review report for the third quarter of the year (Q3 2020), adding that the Federal Government should prepare post retirement facilities instead of increasing retirement age.

The association apparently reacting to recent decision of the Federal Government to increase the retirement age of teachers from 60 to 65 years.

According to the association, “Increasing workforce retirement age is counterproductive under conditions of high youth unemployment rate, instead government should prepare solid post retirement facilities”.

It added that the Federal Government should promote policy to reduce youth unemployment with a view to addressing social unrest.

ABCON noted that recovery from the severe impact of the COVID-19 pandemic on the nation’s economy will be determined by a structured and people-oriented policy aimed at resolving the macroeconomic imbalance arising from the disruptions.

It, however, advised that “Government spending should be directed towards business recovery, poverty alleviation and infrastructure development but structured to give a good mix with monetary policy trust’’.

The association also cautioned the Central Bank of Nigeria (CBN) against pegging the interest rates and other variables, stressing that this could lead to malfunctioning of the system.

The Association instead, recommended that the monetary authority should intervene in selected priority sectors through incentives, adding that this will allow for smooth flow of the whole economy, especially when complemented with fiscal management efforts.

Also, stressing the need for the CBN to address the huge exchange rate mismatch in the forex market, the association, stated: “It is imperative for the monetary authority to actively participate with precision through market level interventions.

“Volumetric interventions and demand push exchange rates must automatically influence the market in the direction the authority desires.

“As example, it is illogical to intervene in the market at N380 when open market is moving at N460. Who takes the margin? This is an exchange rate mismatch.

“The solution to the problem is not throwing millstones or blackmail of any sub-sector of the market, the margin ends in one market and is functional to the volume to satisfy market deficit in supply.”

ABCON also advised the CBN to consider raising the liquidity ratio of banks to discourage foreign currency holding and thereby increase availability of forex, especially for the purpose of increasing liquidity at the official retail segment where BDCs operate.

On the other hand, ABCON called for increased cooperation among BDC operators so as to attract autonomous foreign exchange inflows facilitated by the reopening of the economy.

“Operators are set to make windfalls as foreign currency arrears coming from the long business lockdown are reopening. Traders through cooperation can attract huge autonomous foreign exchange volume through interplay of fine exchange rate margins from the liquidity in the open market,” the association stated.