Though President Muhammadu Buhari is still considering the tripartite committee’s report on minimum wage, governors have said they cannot pay the N30,000 proposed salary. They gave conditions under which they can pay. Labour has rejected their conditions, warning against testing workers’ patience. How will states owing salaries fare if the proposed wage is ratified? TOBA AGBOOLA asks.
When the minimum wage was increased to N18,000 in 2011, it was hailed in labour circles as a feat for the administration of former President Goodluck Jonathan. Seven years after, N18,000 remains the minimum wage, despite the law stating that it should be reviewed every five years. This is irrespective of the fact that many things have changed in the national economic outlook, particularly the inflation rate. Changes in the exchange rate since 2011 include the drastic depreciation of the naira from N150 to $1 to N360 to $1 market rate and about N305 to $1 inter-bank rate.
What this means is that with N150 exchange rate then, a civil servant earning N18,000 would have an income of about $120 per month and could comfortably live on $4per day, which is above the international poverty benchmark of $2 per day.
However, with the current exchange rate which is about N360 to $1, a civil servant earning N18,000 would have an income of $50 per month and would have to live on $1.5 per day, which is below the international poverty benchmark of $2. So, with the N18,000 minimum wage, Nigeria is currently below the international poverty benchmark, making analysts to conclude that it is a poor nation.
The organised labour – represented by the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) – has been at loggerheads with the Federal Government over what should be the least take home pay for the average worker. While labour has shifted ground from its earlier demand of N65,000 to N30,000, which is N12,000 above the prevailing N18,000, the government says it can pay N24,500. But the tripartite committee, comprising representatives of government, labour and private sector, has come up with N30,000. This has since been presented to the President Muhammadu Buhari.
Minimum wage, sometimes called a living wage, can be calculated in the amount or magnitude of wellbeing it can afford for the average worker, including clothes, food, savings, education and even health.
Speaking to The Nation on his perception of the new minimum wage, Ahmed Shokunbi, a fashion designer, said that being in the private sector, he is in no way directly affected by the proposed salary but agreed that it is a step in the right direction. He said the Federal Government’s concession to labour is meagre compared to the cost of foodstuffs in the market. “If it is implemented, it will be good for the common people like us. This is because there will be a trickledown effect for us,” he said.
According to Shola Adedeji, a civil servant, despite the fact that civil servants have not benefited from the proposed salary increment, it is already affecting prices in the market. His grouse is that there has been sporadic increment in the prices of goods in recent time. “For instance, a small bottle of Coke, which was formerly N100, now sells for between N120 and N150. We only heard of minimum wage and have not yet received it, but it has started taking its toll on civil servants already. The market people seem to have raised their prices waiting for the minimum wage to come. My earnest prayer is if it is going to come into effect, let it come fast. It is only in Nigeria that you see that when prices go up, they don’t come down again,” he lamented.
Also speaking, Mrs Ngozi Ojeme, also a civil servant, said that she was happy when she heard of the new minimum wage. But like Adedeji, she expressed sadness that even before it has come into effect, the market is already reacting. “We have no option but to adjust to the new prices. That is why some of us were afraid when they started talking about minimum wage. I know it will push prices up. You can see now even before the minimum wage, prices are already going up. So it is better for government to look into our expenses.”
Likewise, Chidi Ognonaya, a civil servant and taxi driver in Lagos, disclosed that the minimum wage does not help matter to him. This is because, he said, if an estimate of the total number of Nigeria’s public workforce at the federal, state and local government levels is carried out, it is likely not more than 5million in a population of almost 200 million. “So I think it will lead to a rise in prices. That is why the last time they talked of a strike action, I called them ‘lazy civil servants.’ Some people depend solely on government and government cannot carry us all. People are not creative and innovative in their survival strategy in this country,” he said.
Mrs Jomiloju Bakare, a tailor said: “All this talk about minimum wage, about N30,000 or N40,000 cannot really solve the problem of the Nigerian people. We should not deceive ourselves, the N30,000 will not translate to any significant transformation in people’s standard of living. This is because if you relate the N30,000 to the cost of living, that money does not really add much. So the money they want to use as bazaar in the minimum wage, why don’t they invest it in power? If there is stable electricity, forget the minimum wage, citizens will be empowered. The naira doesn’t have value. These are just distractions and we know that some states won’t be able to afford it,” she cautioned.
Adding his voice to the issue, Gambo Usman, an engine operator at a processing firm in Lagos, heaped the blame on the Federal Government. The Federal Government did not get it right, he said. “They should have gone into consultation with the state governors and the Houses of Assembly to see if it is feasible. I believe some state governments can even pay more than that. If some people say they cannot pay salaries, it is because they are not asking the right questions, such as how much do they generate from their internally generated revenue and what do they use the money for? They use their monthly federal allocations and their internally generated revenues for frivolous foreign trips and expenses.
“After spending public funds recklessly, the governors will come to say they cannot pay salaries. They have the means to pay N30,000 and even beyond that. There are states that arrange marriages for couples and even give them funds to start businesses. Is that a government business? When there are no books in our schools and our hospitals are poorly equipped, how much is the salaries of governors and legislators and their aides? By the time we reduce the cost of running government, we can pay more than N30,000,” Usman advised.
Like many critics, Usman expressed dissatisfaction with the modus operandi of the labour unions. “The labour union has become politicised; what they are doing is politically motivated. It is all a game plan by the ruling APC to promote their campaign for 2019. If not, why now. The labour union should have been out fighting for the poor man’s interest a long time ago. Like during the fuel hike time, that is when they should have raised their banners if they were truly pro-poor,” he carpeted the labour leadership.
But Adam Ohiza said the proposed salary review is a good development, though he concluded that it is not viable at the moment because of negative implications for the economy. “It may lead to inflation in the economy and that won’t augur well for the economy,” he said.
On his part, Shehu Zakari who work with the National Agency for the Control of Aids (NACA), said: “Let’s look at it from two different perspectives, that is, how it affects your life as an individual, before you look at the economy. How does it affect your life? In that regard, the minimum wage is well deserved because our country seems designed to favour the wealthy few.
“That is why you see the governors ganging up to say they cannot comply or they will be forced to down size. These governors have been spending massively on their welfare having a multiplicity of aides. So the minimum wage is well deserved. Why is it that in this country, everything must be politicised? By the time the government enacts this law, I think the minimum wage will have a ripple effect on the private sector. If it is religiously implemented, the private sector will follow suit,” he said.
More two weeks after submitting the report of the tripartite committee on the mew minimum wage to President Muhammadu Buhari, the organised labour seems to have grown impatient. Having not heard from the Presidency, labour chiefs have warned that workers are running out of patience with government over what they described as the slow action on the minimum wage issue. On November 5, President Buhari received the report of a tripartite committee he set up to fashion out a new minimum wage for workers.
The Secretary-General of the Trade Union Congress, Musa Lawal, said that labour would not accept any sum less than what was agreed on by the committee. “It is the tripartite committee decision for workers to be paid N30, 000 as minimum wage. There is no going back by labour on the amount.” He said that any governor who would not pay the sum should have no place governing a state, noting that governors should respect agreements they entered into.
Warning further, Lawal said that labour would not hesitate to return to Abuja for further dialogue on the issue if the need arises, rather than waiting endlessly on the matter. The Deputy General-Secretary of the United Labour Congress, Chris Onyeka, said also that governors were bound to pay the N30, 000 because they were represented in the committee, alleging that the apparent delay in resolving the wage issue is a cover-up to frustrate workers on the matter. “The delay is a cover-up. Except President Muhammadu Buhari wants to say that the tripartite committee report submitted to him has become irrelevant. For now, the meeting between the President and the governors and threat by the latter to sack workers are delay tactics on the wage implementation. We will not take it,” he warned.
To avoid a major labour unrest ahead of the forthcoming general elections, Onyeka urged the President to expedite action on the new wage issue and forward the bill to the National Assembly. President Muhammadu Buhari met behind closed doors with representatives of Nigerian Governors’ Forum (NGF) over the disagreement between the organised labour and state governors on the proposed N30,000 minimum wage. The governors, after the meeting, however refused to disclose the outcome of their discussions to journalists. Chairman of the NGF, who is also the Governor of Zamfara State, Abdulaziz Yari and the Minister of Labour and Productivity, Chris Ngige, were at the meeting. Others governors at the meeting include Akinwunmi Ambode of Lagos State, Atiku Abubakar Bagudu of Kebbi State, David Umahi of Ebonyi State, and Udom Emmanuel of Akwa Ibom State. Enugu State and Kaduna State governors were also at the meeting. The meeting came a week after the governors had an emergency meeting where they announced that they would not be able to pay the proposed N30,000 being demanded by labour unions. The governors are insisting that unless the monthly federal allocation is substantially jerked up, most states can’t afford to pay what is being proposed.