The threat of strike, from the 1st of December, by the Nigerian Labour Congress (NLC), in states that are yet to agree on when to start paying the new Minimum Wage, of N70,000.00 is reasonable. The National Minimum Wage (Amendment) Act, 2024, was enacted by the National Assembly, on 29th July 2024. The Act increased the minimum wage from N30,000.00 and reduced the review period from five years to two years.
Before the Bill became an Act, it was robustly debated by the relevant parties ; made up of the federal and state governments, the organized private sector, and the representatives of the NLC. Though most state governments had shown lethargy during the debate, they eventually came on board, and the bill was passed. Considering the galloping inflation, the Labour representatives, initially asked for outrageous wages, but following negotiations with the team set up, by the federal government, they kept coming down, until President Bola Ahmed Tinubu, intervened to help the parties agree to what the payers can afford to pay, and what could tamper the inflationary pressure on wages.
So, after that rigorous endeavour, to achieve an agreeable Minimum Wage, no state has any reason not to pay, what has become a law. After all, the economic reform policies of the federal government have been putting more monies into the state coffers. According to reports, the statutory federal allocation to states in 2024, will increase by 69 percent. In 2024, the states are expected to receive N2.2trillion more than the N3.3 trillion they received in 2023. The Nigerian Extractive Industries Transparency Initiative (NEITI), reported, that 36 states of the federation shared N1.51trillion, in the first half of 2023, compared to N2.59trillion in 2024. Of that humongous amount, the oil bearing states, got 626.33billion. So, why should any state, delay on the payment of minimum wage?
The states which are yet to reach an agreement with their respective state NLC, on the implementation of the minimum wage, are Katsina, Cross River, Zamfara and Imo States. The concerned states within the first quarter of this year, got the following : Katsina – N60.58bn, Imo – N58.06bn, Zamfara – N48.08bn and Cross River – N40.08bn. In 2023, before the removal of fuel subsidy, Katsina State, got 85.00billion, and after, 106.43billion, making a total of 191.43billion. Zamfara State, before the removal of subsidy got 52.57billion, and after 66.6billion, totaling N119.17b. On its part, Imo State, got 68.49billion before, and 83.90billion after the removal, making a total of 152.39billion.
While the four laggard states are not amongst the highest state earners in the country, they are not amongst the lowest either. So, again I ask, what could be their reason for delaying the implementation of the National Minimum Wage? Such reason cannot be altruistic, considering the by- product of the necessary, but painful reform programs, of the federal government, which is yielding the extra monies accruing to the states.
The major by- product of that reform, is the inflationary pressure on goods and services, especially food items. With inflation at 33.9 percent in October, no fair minded State Governor, would hesitate for an extra day, to pay the new minimum wage. Considering the effect of inflation on the cost of living, some state governors have reduced the working days of the state civil servants, to three days, and some have introduced some other measures, to cushion its impact on the citizens. Some states also established special markets, where basic food items, are sold to civil servants at subsidized rates.
Another major impacted social need, is the cost of transportation, which further increases the inflationary pressure. An outcome of the deregulation of fuel price, from which the more-money comes, movement of goods and services have become a big cause for worry, for Nigerians, whether in the rural areas or the urban centres. I wonder how state workers, still paid the old minimum wage, afford to go to work, feed and pay for other essential needs. One of the laggard states, Zamfara, reportedly implemented the old minimum wage, enacted in 2019, only this year.
Surprisingly, Imo State which is an oil bearing state, is reputed among the laggards, as I write. Those who know Governor Hope Uzodinma, said he does not do things in half measure, especially when it has to do with infrastructure development. I hope he is aware that former Governor of Ekiti State, Ayo Fayose, years ago, educated those who were more educated than him, that stomach infrastructure, is one aspect of infrastructure development. And minimum wage if implemented, is not only about stomach infrastructure, both could lead to other forms of infrastructure development.
A well motivated work force, is a sine qua non for economic prosperity of the state. While the workers would become more productive, if their welfare is assured, with more money in their pockets, they would have more disposable income, which also impacts the economic prosperity of the state, as there would be increased payment for goods and service. Some states have even agreed to pay more than the National Minimum Wage, and on the top chart are Lagos and Rivers State, which will pay 85,000.00 every month.
This column agrees with the fundamental principle, for the removal of fuel subsidy and the floating of the naira, despite the severe economic hardships occasioned by the policies. Indeed, it agrees with the position that there are no real alternatives to those policies. To do otherwise, was to keep postponing the evil day, which was already at the nation’s doorstep. What is, however, hampering the full success of the programs is the structural inefficiencies, which allows corruption to continue to thrive. Sadly, political office holders still find it easy, to pilfer public resources, without consequences.
Considering the antecedents of PBAT, in governance, it is hoped that he will incrementally rein in public corruption, by using technology and the law to tighten the loopholes, through which public resources are pilfered. Expectedly, the federal government has given effect to the new minimum wage, and the current wage will be due for upward review, in the next two years. As I have argued in the past, what requires to improve is the public and private wages, and not subsidy on fuel and the national currency, which benefits a few persons within the national economy.
Hopefully, the NLC will stare down the state governors, who are dillydallying on the payment of the new National Minimum Wage, and use labour tactics, to compel them to pay what the law says. As they pressure the states, the local governments must be pulled along, and of course, the private sector. The Nigerian economy can only make progress, if it modernizes. And the era of a privileged few, getting the benefits of misguided subsidies, must give way to economic certainties, which drives genuine economic progress.
