Nigeria has exited from recession but Nigerians are yet to feel the impact. The benefits of the recovery from prolonged economic doldrums are coming in trickles but even the trickles can hardly form a drop in the surging ocean of pervasive poverty. Hardship bites harder as the year draws to a close with President Muhammadu Buhari charging the governors to ensure that workers in their respective states are paid before the Christmas holidays. In the last two years, the issue of payment of salaries has been such a thorny subject to the extent of forcing the federal government to accede twice to a bailout and further agreeing to special refunds to enable the states pay workers. Within the private sector, millions of jobs have been lost, while pay cut and outright retrenchment have become normal in industries striving hard and devising means to succeed.
Amidst this scenario however, a contradictory escalating call for pay rise rises to a fever pitch. Understandably, the brutally recessed economy has mercilessly reduced the purchasing power of the naira. And Nigeria is already running foul of the provisions of the International Labour Organization that stipulates a timely review of the minimum wage law. The nation’s five-year mandatory review has elapsed and the value of workers take home cruelly shrunken by galloping inflation which has obviously left workers with little alternative. The review of the national minimum wage is significant at this time but the stake is certainly very high. How will the states most of whom currently owing months in arrears of salaries and allowances cope with the new minimum wage? And how will the private sector already bruised by downturn and tiers of government battling with lean resources cope with the new wage bill? This and many other questions are troubling.
But the president while inaugurating the 30-man minimum wage committee clarified that the new wage should be anchored on the ability of the tiers of government to pay. However, that is where more troubling questions arise. Why is the federal government legislating on a new minimum wage for states and local governments in a federation? How can the committee on a new minimum wage determine holistically, the ability of different tiers of government whose resources differ across boundaries?
Can the minimum wage in Rivers and Lagos states for instance be sustained in Borno, Benue or Abia? Though the minimum wage is on the exclusive legislative list and the composition of the members of the minimum wage committee drawn on a tripartite basis comprising government at all levels, the workers and the job providers in the private sector to ensure a plural view and guarantee a composite agreement, matching the capacity of these respective tripartite groups with a realistic wage bar looks like a recipe for crisis. The reasons are obvious. The Yoruba socio-cultural group, the Afenifere observed recently and asked the federal government to allow states and local governments decide the minimum they can afford for their workers. Again, this patriotic opinion is not realistic without an amendment of the constitution to remove the minimum wage from the exclusive list.
Chris Ngige is an experienced administrator and an astute politician having been governor of his home Anambra State as well as senator in the seventh Senate and now the Hon. Minister of Labour and Employment. He said that by the new minimum wage, the federal government was determined to eliminate “poverty pain” which according to him occurs when worker’s earning could not guarantee him a good living. In spite, more questions hang on this move by the federal government to live up to its constitutional responsibilities. The governor of Rivers State, Nyesom Wike for example, has argued the current exercise would come out futile. Wike in a broadcast television interview thwacked the charge by the president to the governors to clear all arrears of salaries owed workers before the Christmas holidays, dismissing it as political. He asked the federal government to shed weight so as to demonstrate its genuine sympathy for the plight of the state civil servants. He further punctured the case for a new minimum wage in the absence of a review of the federal revenue sharing formula, wondering how states that could not pay N18,000 minimum wage can afford the new pay rise.
Many have argued that the basis of the on-going wage crisis is the de-structured fiscal federalism where the federal government takes 52% of the revenue of the federation, states 22%, and 774 local governments 26%. The total wage bill of Benue State for instance is about N7 billion with its total monthly revenue standing way below N5 billion. By the time, the minimum wage gets to say N56, 000 (factional leader of the organized labour movement, Joe Ajaero is demanding for N100, 000 minimum wage) from the present N18, 000, what becomes the fate of the state? Even the federal government will not be left out of the pending crisis. By last count, a total of about eleven organized labour unions have gone on strike over wage related issues and unmet agreements spanning close to a decade.
Containing the cascading labour unrest has so far been as a result of the outstanding performance of some of the cabinet ministers in the Buhari administration. Ngige though without a prior labour background has by sheer brilliance, masterfully engineered a proactive labour diplomacy that held the nation from sliding the way of Venezuela. There is no disputing the fact that the socio-political and economic milieu that made a Venezuela have been staring the nation on its face in the last two years. Therefore, that the ever sensitive and easily restive labour has neither snapped its patience nor triggered a social upheaval is to the credit of the Minister of Labour and Employment.
Seething discontent is widespread. Though the federal government has relatively met with the demands of workers, there is palpable apprehension as to what the future holds. Your guess is as good as mine. The bottom-line is that the nation is headed for further doom unless the economy grows. Resurrecting the dying value of naira and through that, restore the value of wages and income is a smarter way to achieve better working conditions for workers. Pay rise will lead to rising costs of goods and services, making it easy for inflation to eat away the added value.
Importantly, which private sector organization can afford a wage increase in an environment where businesses are posting losses and retrenchments at the centre stage? With the 2017 budget performing woefully at 15%, where is the assurance that 2018 will be better? The mass discontent in the land can easily be measured by a recent warning by the leader of the APC, Asiwaju Bola Tinubu that hunger is ravaging the length and breadth of the nation. And with the governor of Imo State, Rochas Okorocha, another leader of the ruling APC, declaring that 85% of Nigerians are unhappy, which better way expresses the muted upheaval at hand? Minimum wage looks more of a recipe for maximum woes!
- Udekwe writes from Abuja.
