Citing sharp decline in national revenue triggered by fall in oil prices, some governors have threatened to stop paying the N18, 000 minimum wage or retrench workers. But organised labour has dismissed the threat as a joke. To labour, it is a ploy to frustrate negotiation for upward review of the national minimum wage as required by law. Already, labour is mobilising its affiliates for a showdown, should the governors make good their threat. Assistant Editor CHIKODI OKEREOCHA reports.
Governor Adams Oshiomhole of Edo State is known for his fierce rejection of injustice and an outstanding resolve to stand up to it. He demonstrated this attribute during his days in the labour movement where he was former President of Nigeria Labour Congress (NLC). So, when the comrade governor, as Oshiomhole is popularly called, recently announced his readiness to lead a protest to force some state governors to back down on their threat to reduce the N18, 000 monthly minimum wage or embark on massive retrenchment of workers, not a few Nigerians took him serious.
To Nigerians, especially workers, Oshiomhole’s readiness to personally lead the battle against his governor colleagues whom he said have the capacity to pay the N18, 000 minimum wage, it was clear signal that indeed, a major showdown is imminent. The labour leader hinted this much when he said: “it is clear from all indicators that 2016 is likely to be very tough with the continued decline in revenue and rising expectation on the part of our people and with many state governments, local governments, and perhaps, even some federal agencies defaulting in the payment of salaries and allowances. The level of strike activities in the economy is going to be very high…”
He spoke penultimate week in Benin, the Edo State capital, during a meeting with traditional rulers from Edo Central Senatorial district. In an apparent reference to the governors’ threat to lay off workers, he said the level of unemployment in the country is already unacceptably high, warning that “it could get even higher if we are not careful.” While pointing out that Edo State has been trying to ensure it sustains the tradition of meeting her wage obligation because the consequences of not doing so are huge, he reiterated the fact that the welfare of the people remains the main business of state governors hence they should be able to pay the N18,000 minimum wage.
Sometime last year, some state governors touched the raw nerves of workers when they announced that they would no longer pay the N18, 000 minimum wage in view of the sharp decline in revenue caused by falling oil prices. The governors, under the aegis of Nigeria Governors’ Forum (NGF), had after their meeting in Abuja, stated that the N18, 000 minimum wage was imposed on them when oil sold for $126 as against the price of $41 per barrel. This was the price at the time the governors pushed the argument. Oil price hit an all time low of $32.66 per barrel last week, the lowest since 2002.
The NGF’s statement, conveyed by its Chairman, Governor Abdul’aziz Yari of Zamfara State, said: “The situation is no longer the same compared to when we were asked to pay N18, 000 minimum wage, when oil price was $126 per barrel and continued paying N18, 000 minimum wage when the oil is $41, and the source of government expenditure is oil, and we have not seen prospects in the oil industry in the near future.” He said the way out of the situation was the diversification of the economy with attention to agriculture and mining.
Governor Abiola Ajimobi of Oyo State was more direct when he stated that there was no way the country could continue with a situation where expenditure was more than income. He inadvertently drew the battle line between the governors and labour when he said, “We are faced with a situation where we either have to reduce cost through salary reduction or downsize. All these we don’t want to do but prefer to have a roundtable with the President, ministers and economists to look for means of getting out of this problem.”
Labour threatens fire and brimstone
However, if Ajimobi and his colleagues expected to get labour’s understanding, they were wrong. Labour would hear nothing of either reducing cost through salary reduction or downsizing. And by the time the labour movement comprising the Nigeria Labour Congress (NLC) and its various affiliates started taking turns to condemn and call the governors’ bluff, it became clear that the options dangled before them failed to hit the right chord.
For instance, as far as NLC President Comrade Ayuba Wabba is concerned, the governors’ threat was mere ploy to frustrate the demand for an upward review of the N18, 000 minimum wage. Wabba has at various fora, stated that the five- year period stipulated for the review of the minimum wage had lapsed, hence NLC is working in collaboration with the Trade Union Congress (TUC) to arrive at a new minimum wage to be presented to government.
For instance, at a recent courtesy call by the NLC to Senate President Bukola Saraki, in Abuja, Wabba said NLC will submit a new minimum wage to the National Assembly (NASS), as N18, 000 minimum wage is no longer reasonable because of the current economic reality. He recalled that the last time the Minimum Wage Act was propagated by NASS was in 2011 and is due for evaluation.
Wabba’s words: “The five-year circle during which the National Minimum Wage is due for review is here. The devaluation of the naira from N150 to $1 to about 242 to $1 today underscores the grim situation for salary earners in the country, against the fact that our economy is import driven.
“The devaluation in simple economic terms means that the purchasing power of the ordinary Nigerian wage earner is grossly devalued. As a result, Congress will soon submit a New Minimum Wage demand, which we hope will be negotiated by the tripartite negotiating team.”
The National Minimum Wage Act was signed into law by former President Goodluck Jonathan in 2011 after both houses of the National Assembly passed it into law, with a proviso for it to be reviewed upwards after five years. Wabba said NLC hopes that when the end product of negotiation for a review is brought before NASS for legislation, it will be treated with dispatch.
The NLC President vowed to make the states ungovernable for any governor that tinker with the current minimum wage. “We will ensure that any governor that tries to reduce the N18, 000 minimum wage will not have rest in his domain until the right thing is done. Reducing the minimum wage is something that cannot be defended,” he threatened.
Although, Wabba admitted the challenges in the economy, he said this does not mean that only the workers should suffer the consequence. He pointed out that if political office holders still collect the same salaries nationwide, there is no justification for anybody to think of tinkering with the minimum wage.
But as workers await the presentation of a new minimum wage by NLC, the immediate past National President of National Union of Electricity Employees (NUEE), Comrade Mansur Muhammed Musa, suggested an upward adjustment of the minimum wage from N18, 000 to at least, N54, 000.
He told The Nation that without such upward review, workers will continue toiling until they visit their graves and that is not what labour is all about. “There should be dignity in labour. So, N18, 000 minimum wage is out of the question. We should come together and demand for N54, 000 minimum wage,” he insisted.
Comrade Musa described the governors’ threat as huge joke. “They (governors) have told us they cannot pay the minimum wage, but they have not told Nigerians whether they cannot also pay the maximum wage, because we know they are taking the maximum wage, he said, asking, “is it only the minimum wage of N18, 000 that they are giving to workers that they cannot pay?”
The NUEE chief insisted that there are areas of wastages in the country that needed to be curtailed to free up resources to pay workers a new minimum wage of N54, 000. Hear him: “If we can reduce these areas of wastages we won’t have problems. Go to any of the Government Houses, nobody drives a golf car; they are all driving jeeps. Look at the convoy of governors when they are going from one place to another; look at the cost of fuel for their vehicles, personnel, and other allowances; you can go on and on and on.”
Comrade Musa has an ally in the Secretary-General of Association of Senior Civil Servants of Nigeria (ASCSN), Comrade Bashir Lawal. The ASCSN scribe in a statement made available to The Nation wondered why governors who have not deemed it fit to reduce their humongous salaries and allowances are bent on jettisoning the N18, 000 monthly minimum wage.
“Given the current high cost of living, the N18, 000 monthly minimum wage cannot even last the average worker one week yet, the governors are bent on reducing it. This is very unfortunate,” he said, alleging that “governors allocate to themselves, on the average, one billion naira monthly as security vote and spend nothing less than N18, 000 daily to feed one of their animal pets or buy recharge cards for one of their children, or worse still for one of their numerous girl friends.”
Lawal stressed that if state governments could reduce wastages, tackle corruption, and moderate their greed, there would be enough money to pay enhanced minimum wage and carry out meaningful development in their states.
He also pointed out that there is no state in the country that does not have natural resources, but instead of harnessing them they (governors) prefer to wait for monthly handouts and of late, bailouts from Abuja to administer their states.
Comrade Lawal therefore, advised governors who are tired of governance because of fall in revenue allocation to resign and allow more serious minded individuals who are prepared to harness resources of the states for the benefit of the people including workers, come in.
How crashing oil prices put
governors, labour on war path
In fairness to the governors, things have not been looking up for the economy. Since June 2014 when crude oil prices started tumbling, the Federal Government’s finances, and by extension, State Governments’ have been under tremendous pressure. Oil prices, which averaged $112 per barrel by June 2014, have continued to crash, with Brent hitting an all time low of $32.89 per barrel, last week.
The International Monetary Fund (IMF), which predicted that crude oil prices may slump to as low as $20 per barrel this year further raised the blood pressure of Nigerian authorities especially the governors. This is so considering the fact that crude oil revenue accounts for about 90 per cent of Nigeria’s foreign exchange earnings.
With the 2016 budget benchmark oil price of $38 per barrel, it means that if IMF’s prediction comes true, Nigeria’s economy will be in for more turbulence, as there won’t be any buffer for the budget. It also means, by extension, that state governors will be left with no choice than to make good their threat to either stop paying the N18, 000 minimum wage or lay off workers.
Fed govt’s position
The Federal Government through the Minister of Labour and Employment, Senator Chris Ngige has said the review of salaries of workers at the moment is not on the table because of the country’s economic challenges. He said other tiers of government that have more money could pay higher wages.
Ngige, who spoke when the leadership of NLC visited him recently, however, said the minimum wage was an issue that was not contestable since it was a product of legislation backed by an Act of NASS.
The minister said the NLC leadership was quite aware that the governors were playing politics with the issue, stressing that anybody that wants a review of the Minimum Wage Act should approach NASS or ask the President to send an Executive Bill.
The coming weeks and months would determine whether the governors are merely playing politics with the minimum wage controversy or responding to the sustained pressure on their finances caused by the prevailing economic realities. But whichever way it goes, labour appears poised to force down the hands of the governors if they make good their threat.
