Labour’s Deadline for New Wage Expires Today, LCCI Calls for Flexibility in Negotiation

•States urge FG to gradually phase out electricity subsidies in power sector

•Say monies spent on inefficient costs

Chuks Okocha, Olawale Ajimotokan, Onyebuchi Ezigbo in Abuja and Dike Onwuamaeze in Lagos

As the one-week suspension of the nationwide strike by organised labour expires today, the leadership of the trade unions have appealed to President Bola Tinubu to use his position to give the Nigerian workers a deserved living wage.

This was as the Lagos Chamber of Commerce and Industry (LCCI) urged all parties in the ongoing negotiation to consider an amount that would reflect a good balance of economic realities, affordability, and sustainability.

Equally, the Nigeria Governors’ Forum (NGF) has called on the federal government to gradually stop the payment of electricity subsidies saying it is “ineffective.”

The organised labour is expected to convene its organ meeting tomorrow on the matter.

Speaking to newsmen on arrival in Geneva for the annual conference of the International Labour Organisation (ILO), NLC President, Joe Ajaero, said that having submitted its demand to the president through National Minimum Wage Tripartite Committee, the expectation of the workers was for him to consult widely and pronounce a minimum wage that would fill the wide gap income created by economic downturn.

“Of course we should understand that the bill that will be sent to the National Assembly is an executive bill that was why the report of the Tripartite Committee was sent to the president.

“Once the bill is sent to the president, ordinarily the president has to do some consultations. In the last minimum wage report that was sent to President Muhammadu Buhari, I think it was N27,000 and after consideration he moved it to N30,000.

“So it expected that the president as the chief executive will make some adjustments as he has seen clearly that it is not just a margin, but a gulf between N62,000 and N250,000. That is why a lot is expected from him,” he said.

Meanwhile, THISDAY gathered from a reliable source that organised labour is making plans to hold an emergency meeting of its National Executive council to review the progress on the minimum wage negotiations after the expiration of the one-week suspension of nationwide strike today.

The source who spoke to THISDAY on the condition of anonymity yesterday said: “You are aware that we relaxed the nationwide strike in response to the assurance given by the President to ensure the conclusion of minimum wage negotiations.

“Now that the committee has submitted its report to the President, we expect him to do the needful and endorse our request for N250,000,” he said.

The organised labour had demanded N250,000 as the new minimum wage for Nigerian workers, while the Tripartite Committee on National Minimum Wage led by Alhaji Bukar Goni Aji, yesterday, had recommended N62,000, which has been submitted to the Secretary of the Government of the Federation (SGF), Senator George Akume, for onward transmission to President Bola Tinubu.

Director (Information & Public Relations), Office of the SGF, Segun Imohiosen, disclosed that the report was submitted yesterday.

In receiving the report, Akume thanked Aji and members the committee for their commitment and sacrifices.

The 37-member Tripartite Committee was inaugurated by President Tinubu on January 30, 2024, in accordance with the provisions of the Minimum Wage Act, 2019 with the responsibility of recommending a new national minimum wage for Nigerian workers in public and private sectors.

The Tripartite Committee concluded its assignment last Friday.

The statement said a formal presentation of the report would be made to Tinubu for appropriate action, when the leadership of the organised labour as well as representatives of government and organised private sector, who were presently in Geneva, Switzerland, for the ongoing International Labour Organisation (ILO) Conference, return to the country. 

Meanwhile, the LCCI has urged all parties in the ongoing negotiation to consider an amount that would reflect a good balance of economic realities, affordability, and sustainability.

The chamber, in a statement titled “LCCI Urges Labour to be more Flexible and Consider Affordability and Productivity in New Minimum Wage Negotiations,” stated that it was important for the negotiators to have their eyes on ‘a good balance” in order to avoid a situation where a wage is forced on the governments and businesses that would eventually lead to job losses, worsened poverty levels, and hyperinflation where too much money would be chasing too few goods.

The statement, which was issued yesterday by the Director General of LCCI, Dr. Chinyere Almona, called, “on labor to be more flexible, reconsider the government’s offerings, and be concerned about how private businesses can afford to pay the set wage without considering shutting down operations or cutting jobs.”

The LCCI argued that unions should consider labour productivity that is supported by infrastructure rather than high wages with weak productivity. 

It stated: “We urge all parties to consider a wage that is within the financial capacity of both federal and state governments, will help maintain economic stability, and prevent potential layoffs or cuts in essential services.

“It is also pertinent to adopt a wage that supports long-term economic sustainability.

“Over-extending financial commitments could increase borrowing and debt, adversely affecting the nation’s economy.

“All states can uniformly implement the new minimum wage by agreeing to a realistic and achievable wage, ensuring that workers nationwide benefit without significant delays or discrepancies.

“A wage demand exceeding state governments’ capacity could lead to industrial actions, strikes, and widespread disruptions, further hindering economic recovery and growth.”

The LCCI added that, “the federal government’s proposals represent a significant increase aimed at improving the livelihood of workers across Nigeria.”

It, however, argued that it was imperative to acknowledge the fiscal constraints and economic challenges various state governments are faced with.

“Some governors under the Nigerian Governors’ Forum have already indicated their inability to meet the initially proposed higher minimum wage, citing budgetary limitations and the potential risk to essential public services,” it added.

The LCCI also enjoined all tiers of governments in the country, “to show more seriousness about cutting down the cost of governance and be committed to investing more in layers of infrastructure that support productivity and revenue generation.

“With more transparency in governments’ spending, future negotiations will become easier as all parties are well aware of the realities.

“We also call on the government to commit to having the national minimum wage reviewed every five years.

“The government can show concern about personnel welfare by enhancing their allowances beyond the minimum wage, which is only calculated based on basic salaries.”

Almona, noted that beyond the new minimum wage, the chamber was more concerned about having a more productive economy supported with a robust infrastructural base and urged the government to consider implementing special non-cash interventions that would see businesses spend less on production.

“Remove the import duties on food imports and critical raw materials and drastically reduce the import duty exchange rate on agricultural input and other imports that have multiplier effects on prices.

“Implement an aggressive metering programme on power supply and more investment and regulation in the sector to boost power supply through more contractual discipline and gas supply guarantees, and build infrastructure to support local production of essential medicines and more spending to upgrade our public health facilities,” she added.

She summed up that with the government’s commitment to providing these support systems to Nigerians, low-income earners would spend less on these expenditure heads and have a better living standard in the long run. 

However, speaking in an interview on Channels Television, yesterday, Assistant General Secretary, NLC, Chris Onyeka, said the unions won’t accept N62,000 or N100,000 as the minimum wage for Nigerian workers.

Onyeka described the minimum wage proposal as a “starvation wage”, saying, “We have never considered accepting N62,000 or any other wage that we know is below what we know can take Nigerian workers home. We will not negotiate a starvation wage.

“We have never contemplated N100,000, let alone N62,000. We are still at N250,000, that is where we are, and that is what we considered enough concession to the government and the other social partners in this particular situation.

“We are not just driven by frivolities but the realities of the marketplace, realities of things we buy every day: a bag of rice, yam, garri, and all of that.”

Katsina State Governor, Dikko Radda, had on Sunday, said each state government in the country should be allowed to set its own minimum wage.

Speaking on TVC Television, the governor said only Nigeria has one single minimum wage for workers across all the globe

His view represented a greater percentage of the governors who insisted the Nigeria operates a federal system and not a military system of government.

The governor said the minimum wage should be sustainability and affordability.

According to the Katsina State Governor, “It is only in Nigeria that we have one single minimum wage for labourers across all states.

“In other countries, different states have different minimum wages based on sustainability and affordability.

“What is the need for the State government to agree to pay N100,000 if they can’t implement it? he asked.

Minimum wage is currently on the exclusive legislative list, which gives power to only the federal government to determine it.

States Urge FG to Gradually Phase Out Electricity Subsidies in Power Sector

The NGF has called on the federal government to gradually  stop the payment of electricity subsidies saying it is “ineffective”.

The state governors made this known in a document circulated at the tripartite meeting on the minimum wage meeting, titled: “Development of the National Integrated Electricity Policy and Strategic Implementation Plan: Policy Recommendations by State Governments to the Federal Ministry of Power’’.

“Electricity is a commodity and a product that must be paid for by consumers. The states believe that electricity subsidies and other forms of financial interventions in the power sector by the federal government over the last 15 years have been inefficient and ineffective so far,” the NGF said.

It said that rather than improve the quality and reliability of service, electricity subsidies in the sector had been applied to cover inefficient costs and lack of service by Distribution Companies (Discos), Transmission Company of Nigeria (TCN), Generation Companies (Gencos) and gas producers.

The governors recommended a series of policies to tackle the challenges within the power sector.

The recommendation comes at a time when regulatory authority is being transferred to states. In April, the Nigerian Electricity Regulatory Commission (NERC) transferred oversight of the electricity market in Ondo, Ekiti and Enugu to each state’s electricity regulatory bureau.

According to the document, the states recommended that wholesale and retail electricity subsidies to customers and across the Nigerian Electricity Supply Industry (NESI) value chain be reduced and eventually eliminated over time.

“Moreover, the so-called electricity subsidies benefit only customers who are connected to the national grid and enjoy some form of supply reliability. Millions of households, particularly in underserved and unserved communities, pay more than twice the average true cost of on-grid supply.

“The 2001 national electric policy recommended the restricted use of subsidies for the promotion of universal access to electricity. States agree with the retention of this policy.

“To this end, states recommend that wholesale and retail electricity subsidies to customers and across the NESI value chain are reduced and eventually eliminated over time, except for pre-defined customer categories or in line with national economic growth initiatives.

“Where electricity subsidies are deemed necessary, the states propose a cost-of service analysis which will be conducted by the state to determine the cost of supply and arising electricity subsidies for each state,” the governors explained.

They stated that if subsidies must continue to be implemented as a specific policy of the federal government, there must be a provision for funding the subsidies before implementation.

The forum also asked the federal government to be transparent and precise in its regulatory framework to determine the extent of subsidies required and the category(ies) of consumers that would be eligible to receive electricity subsidies.

The states advised the federal government to implement a “no-meter, no-service” policy for all new electricity connections.

According to NGF, the provision of electricity meters to close the huge metering gap is a requirement to make sub-national markets viable.

However, NGF said States Electricity Regulatory Commissions (SERCs) in conjunction with the distribution licensees should be allowed to determine the meter technology, type and form of meters to be deployed within their states’ electricity markets.

“States are of the view that the national electricity policy should mandate an immediate “no-meter, no-service” policy for all new connections, to prevent the metering gap from further increasing,” NGF said.

It urged the federal government to provide low-cost, long-term funding for metering schemes as direct loans to distribution licensees or off-balance sheet funding through special purpose meter finance companies to close the metering gap.

This , it said should be done while also encouraging electricity customers to directly purchase prepaid meters from accredited meter asset providers and manufacturers accredited by the SERC.

“States on their own will implement their viable metering programmes and metering regulations to close the metering gap within their state electricity market,” the governors added.

In terms of electricity tariff, NGF said states will implement different end-user tariff methodologies within their markets according to the state electricity policies and strategic implementation plans, viability and market sustainability requirements and peculiar socio-economic characteristics in states.

“However, states recommend that electricity tariffs should be both efficient and cost-reflective across the federation. States urge the federal government to revert to the 2001 Electric policy recommendation on electricity tariffs regulation.

“The national assembly and the federal government should allow NERC to independently carry out its regulatory functions of determining, approving, and implementing economic wholesale tariffs at the appropriate time, and not (politically) intervene in the tariff setting process,” the forum explained.

In determining wholesale tariffs, NGF said NERC must also adhere to its regulations for tariff approvals and reviews, including the need to transparently hold consultative public hearings and mandatorily consult with states on wholesale tariff methodologies and tariff proposals by licensees of the commission.