By Dr. Olufemi Ogunlowo
"The child who is not initiated into the village will burn it down to feel its warmth." - African Proverb
In October 2023, Nigeria ratified the International Labour Organization's Convention 181, marking a significant milestone in the country's ongoing attempt to modernize its labour market. Yet, like many policy achievements in Nigeria, this development risks being celebrated without being implemented.
ILO Convention 181, adopted in 1997, provides an international framework for regulating private employment agencies. It recognizes the essential role these agencies play in labour intermediation, particularly in emerging economies where traditional job creation mechanisms are failing to keep pace with population growth. The Convention mandates transparency in employment terms, equal treatment for agency workers, protections against exploitation, and freedom of association.
Nigeria must move beyond ratification
For years, Nigeria debated whether the Convention's provisions aligned with our economic realities. Critics feared it would constrain employer flexibility or legitimise practices that labour unions have long opposed, especially outsourcing. But those arguments ignored a crucial fact: the status quo was already unsustainable.
The informal outsourcing of workers without adequate regulation has led to widespread worker dissatisfaction, legal disputes, and reputational risk for companies.
With the ratification now complete, Nigeria has accepted the responsibility of domesticating the Convention's provisions into national law. This is no symbolic gesture. It requires a fundamental shift in how the country licenses, monitors, and holds accountable private employment agencies. It also demands a new clarity in how outsourcing relationships are structured, particularly in industries such as banking, telecommunications, and logistics where third-party staffing has become entrenched.
The labour market challenge is already visible
The scale of the challenge is evident in the numbers. According to the National Bureau of Statistics, as of Q3 2023, over 87 percent of employed Nigerians were classified as self-employed. Many of these individuals are engaged through irregular or non-standard work arrangements that fall outside the formal protections of labour law.
This reality has led to an erosion of job quality and a breakdown of trust between employers, workers, and intermediaries.
ILO Convention 181 offers a chance to reset this relationship. Its focus is not to undermine flexible work but to ensure that flexibility is not purchased at the expense of dignity.
What implementation should require
Workers deployed by agencies must have contracts that clearly define their roles, rights, and benefits. Agencies must be licensed and regularly audited. Employers must remain jointly accountable for labour law violations occurring under their watch.
Some progress is being made. The Federal Ministry of Labour and Employment has initiated consultations with stakeholders to design an implementation roadmap. But there is still no formal legal framework that translates the Convention's provisions into enforceable obligations.
Without this domestic legislation, ratification will remain a political statement with little practical impact.
Implementation cannot be government's job alone
Employers' associations, private outsourcing firms, and trade unions must play an active role in shaping the details. There is an urgent need for sector-specific codes of practice that reflect industry nuances while upholding the Convention's principles.
In South Africa, where private employment services are regulated under the Labour Relations Act, a model of co-regulation exists. Industry bodies set internal standards, while the government ensures compliance through inspection and dispute resolution.
Nigeria must move in a similar direction. A national database of licensed employment agencies, standard contract templates, and transparent reporting obligations would be a good place to start.
The real cost is continued informality
Critics often argue that stricter regulation will increase compliance costs. But the real cost lies in continued informality: low productivity, weak employee morale, high attrition, and reputational damage.
Companies that invest in structured, ethical outsourcing models are likely to outperform those that rely on a revolving door of underpaid, under-trained, and unprotected workers.
A bridge for young workers
Perhaps more critically, the successful implementation of Convention 181 could open a new chapter in Nigeria's response to youth unemployment. With more than 70 million young people entering the labour market over the next decade, the country cannot rely solely on traditional employment structures.
A regulated private employment sector, operating within clear, enforceable rules, could provide a bridge between informal hustle and formal work.
For this to happen, however, workers must be empowered with information. Most agency workers in Nigeria are unaware of their rights or of the obligations of their employers and recruiters. Civic organizations, legal aid clinics, and HR professionals have a role to play in demystifying this new regulatory space.
A lever for reform
ILO Convention 181 is not a silver bullet. It cannot solve the deep structural challenges of Nigeria's labour market on its own. But it can be a lever for reform, a framework for accountability, and a signal that the era of unregulated outsourcing is drawing to a close.
The proverb reminds us that when people feel excluded from the structures designed to protect them, they may turn against those very structures. If implemented well, Convention 181 offers Nigeria a way to bring millions of workers into the fold of protection, productivity, and potential.
Dr. Olufemi Ogunlowo is the CEO of Strategic Outsourcing Limited and writes on labour policy, workforce strategy, and employment transformation for BusinessDay.