Bagudu: N62,000 Recommended Wage in National Interest, Based on Economic Realities 

·    Governors say compelling states to pay may lead to 40% retrenchment

·    Disclose only 10 subnational govts can afford new salary structure

Chuks Okocha and Olawale Ajimotokan in Abuja

The federal government has maintained that the N62,000 monthly minimum wage offer recommended by the tripartite committee set up by President Bola Tinubu was made after taking into consideration the national interest and current economic indices.

Minister of National Budget and Economic Planning, Senator Atiku Bagudu, and Chairman of the 37-man Tripartite Committee on National Minimum Wage, Alhaji Bukar Aji, made the remarks in separate chats with THISDAY in Abuja.

However, the committee’s recommendation to the president at its meeting on Friday night was rejected by organised labour, which insisted on N250,000 as an acceptable national minimum wage.

State governors, under the Nigeria Governors Forum (NGF), also doubled down on their rejection of the N60,000 proposed minimum wage, maintaining that compelling them to pay the proposed minimum wage will have consequences.

A source, who disclosed the position of the governors at Friday’s meeting of the minimum wage committee, said the governors held that any forced wage bill on the states could lead to retrenchment of about 40 per cent of workers in the states.

The source told THISDAY that most of the states were heavily indebted due to loans taken by their predecessors and could not afford the new minimum wage.

The source said only 10 states could afford the new minimum wage.

In the interview with THISDAY, Bagudu stated that members of the committee took cognisance of the prevailing economic situation, information, data, national interest, developments in the polity, macro economy and the ongoing economic reforms by the administration before arriving at the figure.

He said, “This is what we have done; I was a member of the 2018 tripartite committee, then as a governor representing the state governors. And in that committee as well, views were divided, like in the Organised Private Sector (OPS) and the organised labour as we had then. And a report was sent to Mr President, just like we did now.

“So, I am glad that democratic rights have been exercised. Mr President has been encouraged and what has happened is to show that this is a process where you bring your best argument. The labour has participated and they have presented different views and different arguments, which we are going to send to Mr President.”

Bagudu’s position was echoed by Aji, who is incidentally a former Head of the Civil Service of the Federation (HoSF).

Aji said the committee’s recommendation to Tinubu, which would be sent to the National Assembly for passage as National Minimum Wage Act, came as a “result of deeper understanding and deeper study of all the economic indices”.

He added that caution was taken in order not to recommend a figure that would further throw the country into confusion.

According to Aji, “We studied all the economic indices, the current inflation situation, the state of the economy, affordability, ability, capability and sustainability. Caution had been displayed all through so that a figure that will further throw the country into confusion is not allowed.

“This is because if any party goes into an agreement of any figure that it knows from its sources that it can’t afford, then it is going to create another problem. But I thank God that all wisdom came together and the recommendation to Mr President is going along that direction.” 

He described the negotiation on national minimum wage at the tripartite level with organised labour and the organised private sector in the last four months as a serious business.

Aji likened the recommendations made to the president to the one made in 2018, when organised labour proposed N30,000 as the national minimum wage, while the government side recommended N24,000.

He added that the tripartite committee had no power to approve but only to recommend to the president.

But the governors maintained their rejection of the N60,000 proposed minimum wage, saying forcing them to pay the proposed wage would have negative consequences on job security and employment.

According to a source, who disclosed the position of the governors, any forced wage bill on the states could lead to the retrenchment of up to 40 per cent of the workforce in the states.

The source listed only 10 states that could afford the new minimum wage without affecting the overall strength and development of the states as Lagos, Delta, Akwa Ibom, Bayelsa, Cross River, Rivers, Ogun, Kano, and Kaduna.

The source said, “Kano State is listed in the states that can pay the new minimum wage because it does not have any huge debt burden. This is quite like some states across the federation.

“You see, over 24 drivers attending to only four or five vehicles in the fleet. What do you want such state governments to do? Sack them? But where the states are forced or coerced to pay, there could be consequences of up to 40 per cent retrenchment. States cannot be forced to pay the minimum wage because Nigeria is operating a federal system of government, which is based on the ability to pay.

“In the United States, which we are emulating, take, for instance, the salaries of the governors of Vermont, New York and California are different with some rural states of Mississippi and others.  The governor of Vermont and his counterpart in California earn over $200,000 per year, but the governor of Mississippi earns less. This is operation of the federal constitution in place.”

The source further said revenue accruing to states only increased recently, as the daily crude oil production had remained poor.

It said the tripartite meeting challenged the president of Trade Union Congress (TUC), Mr. Festus Osifo, to explain from his experience since he came from the oil union what they had done to curtail oil theft and militancy in the South-south geopolitical zone.

THISDAY was further told that the labour movement at the meeting threatened to picket Anambra State because the state was allegedly not paying the minimum wage. But the governor, Chukwuma Soludo, was said to have countered that the state had been paying.

The unions maintained that Anambra State was not paying the consequential adjustment as prescribed in the 2019 Minimum Wage Act, prompting Soludo to tell the gathering that in the 2019 minimum wage bill, there were no provisions for consequential adjustment payment.

The governors said at the Friday meeting that the N60,000 minimum wage was not sustainable and could not fly.

NGF’s Acting Director of Media and Public Affairs, Hajiya Halimah Ahmed, in a statement, said the forum urged all parties to consider the fact that the minimum wage negotiations also involved consequential adjustments across all cadres, including pensioners.

NGF cautioned parties to look beyond just signing a document for the sake of it, insisting that any agreement to be signed should be sustainable and realistic.

It stated, “All things considered, the NGF holds that the N60,000 minimum wage proposal is not sustainable and cannot fly. It will simply mean that many states will spend all their allocations on just paying salaries with nothing left for development purposes.

“In fact, a few states will end up borrowing to pay workers every month. We do not think this will be in the collective interest of the country, including workers.

“We appeal that all parties involved, especially the labour unions, consider all the socioeconomic variables and settle for an agreement that is sustainable, durable, and fair to all other segments of the society who have legitimate claim to public resources.”