N70k Minimum Wage: Have Workers Been Left in the Lurch? 

The agitation by Nigerian workers over minimum wage dates as far back as Nigeria’s independence when the fiery labour leader, Pa Michael Imoudu, led Nigerian workers against the then repressive Colonial Government for higher wages and better welfare. It is therefore, disconcerting that almost seven decades after, the narrative hasn’t changed much. Labour leaders are still being hounded, intimidated and arrested on flimsy allegations. The recent agreement by the Government to pay Nigerian workers a N70k minimum wage, doesn’t seem to have resonated with State Governors who appear either unwilling or unable to implement the agreement. In this Discourse, Dr Emeka Ejikonye; Jide Ojo; Ayoade Oluwasanmi and Babajide Idowu approach the issues from different perspectives, with a view to proffering solutions to the imbroglio    

On the N70k Minimum Wage

Dr Emeka Ejikonye

What is someone who has lost every sense of optimism, motivation, encouragement and excitement in the Nigerian p expected to write about the payment of this N70k minimum wage by the governments? A political elite whose daily actions portray a bunch who are highly incorrigible, utterly bereft of empathy and stoutly fixated on deepening the impoverishment of a languishing citizenry. What am I supposed to write?

Erosion of Wage Increment by PMS Price 

For starters, where is the optimism when, apparently, whatever iota of purchasing power that is supposed to derive from the wage increment, has already been eroded by the inhumane and unfathomable increase in the pump price of petrol to an average price of N1,000 per litre? Has the resultant inflationary trend, not already eliminated whatsoever benefits that would derive from the supposed largesse?

 The more bewildering aspect is the utterly irrational back and forth between the NNPCL and Dangote Refinery, over the prices of petroleum products produced by a wholly-owned private enterprise company. This is so disheartening, to say the least. As a young Master’s Degree student at the University of Calabar, way back in 1993, I still recall the several interviews late Chief MKO Abiola granted to the BBC en route the aborted Presidential election of that year. One of his several electoral promises was to ensure that NNPC tells Nigerians how much it costs to refine a barrel of crude oil, so that the Government will set the selling prices of petroleum products at realistic levels that are affordable to the citizenry. Is it not utterly shameful and disdainful that from that time to this date, no one in our oil industry has been able to provide an answer to this poser by the great MKO?

 Today, I hear the ‘experts’ tell us that Dangote must sell at “international competitive prices”. Yes, I totally agree. However, the questions arise, who set these prices ab initio? Or did they fall from the blue? Were they not set by another human company after due very careful and painstaking calibration of its costs of production and addition of an acceptable percentage as profit margins, to determine the selling prices? Mind you, nothing is wasted in this single barrel of crude oil. From therein, we derive diesel, kerosene, aviation fuel, engine oil, and allied raw materials for producing Vaseline, candles, etc., in addition to the almighty PMS.

 Who says Dangote Refinery cannot also independently calibrate its own costs of production and profit margins, to arrive at and set its own selling prices? Undeniably, Dangote is a private enterprise company that is set out to make profits. No one can argue against this. However, it is also undeniable that Dangote is an independent player in the global oil marketplace. Who says the company does not have the right to equally set a global standard, for others to follow?

 Or, come to think of it, maybe NNPCL donated the crude oil to Dangote Refinery free-of-charge. If not, why should NNPCL be fixing selling prices for the company? The more I think of this whole scenario, the more I get confused. For goodness sake, where is the basic law of comparative advantage that we were taught in elementary economics of secondary school? Why are our experts evading this imperative, this fundamental natural endowment of our polity? What sort of mental servitude is this?

To make the matter worse, we now hear of the rumoured intention to increase the value added tax (VAT) to 10%. Widen the tax net! Tax them to death! Paradise for the few! Hell for the mass majority! We must rake in all the money from the commonwealth into our privileged private pockets, and deliberately avoid putting in place safeguards for guaranteeing that public funds are used for uplifting the living standard of the mass of the citizenry! Is this not a deliberate ploy at depopulation? In Asia and the Americas, natural disasters like earthquakes, tsunamis, hurricanes/typhoons, landslides, etc, are the major means of depopulation, but, in Africa, the way to go is inhuman government policies. Wipe out the citizenry through impoverishment! Oh yeah!

 In Nigeria today, we have bastardised the very noble concept called “governance”. Certainly, it does not function as “the activity-process through which elected officials use the resources of a citizenry in delivering services for improving the quality of livelihood of that citizenry”. On the contrary, this glorious lever of social advancement operates as a scourge for vanquishing the citizenry through mass pauperisation. Wipe out the middle class! It is not deserving of existence! We, the privileged tiny minority, must live in disgusting opulence, while they, the vast majority, must languish in abject squalor! Just lubricate their urge with palliatives! Oh yeah!

In the face of these utterly disgusting crass insensibilities, you ask we to write about the N70k minimum wage? What am I supposed to write? What? Just tell me! As it is, whatever benefits that should derive from the wage increment are comatose, if not dead, before arrival. I am highly discouraged! I am downright pessimistic! I am not excited! For me, there is no glimmer of light at the end of that tunnel. 

Labour Leaders, ‘Gear Up’

The likelihood of any of the governments in Nigeria paying the N70k minimum wage, is next to zero. This is my modest opinion. The Labour leaders had better gear up, if they are really and seriously sincere to their followers. In this country, I have developed a thick skin to surprises from any quarter, even from the leaders of the Labour Unions. ‘Compromise’, ‘sell-outs’ are all part of the game; the cards on the table. I am not deceived.

Conclusion 

You ask why my high sense of gloom? Precisely because, the very people who are supposed to pay the wage increment, are fixated on cornering every kobo from the public purse towards the 2027 agenda. The objective is clear; “deepen the weaponisation of poverty to eliminate every form of formidable opposition towards ‘victory’ during the general elections”! After all, if 2023 did not teach me anything, it jolted me to the stark reality that electioneering can be cash-and-carry. The electorate can go about laughably and stupidly groping in the illusion of “free, fair and credible” polls. On our part, the game-plan has gone beyond outright purchase of the umpire and arbitrator. Una never see anything yet. Make una just remain ‘resilient’ and continue to ‘adjust’ to hardship. “Suffer-head” na una middle name. Mtcheeeewww!!!

 God! I earnestly wish and fervently pray to be proved wrong. Please, touch their hearts to appreciate the real meaning and essence of “Love”, “Selflessness” and “Legacy to Posterity”. We just cannot continue to be in penury, in the midst of plenty. Nature! Existence! Being! Intervene! Salvage our situation!

Dr Emeka Ejikonye, Specialist in Public Budgeting, Abuja

Ruckus Over N70,000 New National Minimum Wage

Jide Ojo

Introduction

President Bola Tinubu signed into law N70,000 as the new national minimum wage on Monday, July 29, 2024, after the bill was expeditiously passed into law by the National Assembly. Hitherto, the minimum wage was N30,000. It was also agreed that due to inflationary trends, the new national minimum wage will be reviewed every three years, rather than the statutory five years. This was no mean achievement for the Nigerian Labour unions. They had hitherto asked for N250,000, but had to settle for N70,000 when Government said that is the only condition that will make it not to increase the price of petrol. Unfortunately, despite this gentleman agreement, the Federal Government recently jerked up the price of petrol to above N800 per litre.

Recall that on January 30, 2024 a 37-man Tripartite Committee to negotiate the new national minimum wage was inaugurated. It was headed by a former Head of Service of the Federation, Alhaji Bukar Goni Aji. The Committee submitted its report, on June 10, 2024. It’s almost two months since the new minimum wage was signed into law, but no Federal or State worker has yet to enjoy the payment of the new wage. In fact, just last week the Federal Government inaugurated a 16-man Committee on the consequential adjustments in salaries, in line with provisions of the National Minimum Wage Act, 2024, of N70,000 approved by President Bola Tinubu. The Head of the Civil Service of the Federation, Mrs. Didi Walson-Jack, inaugurated the Committee in Abuja.

State Governments Kick Against N70,000 New Minimum Wage

While some States have also set up an Implementation Committee for the N70,000 new minimum wage, most States have expressed inability to pay the new wage. Recall that while the Labour unions were asking for N250,000, the Nigerian Governors Forum (NGF)  issued a statement that they cannot pay even N60,000. The Ag. Director Media and Public Affairs of the NGF, Hajiya Halimah Salihu Ahmed, disclosed this in a statement on Friday, June 7, 2024. The statement read in part: “The Nigeria Governors’ Forum is in agreement that a new minimum wage is due. The Forum also sympathises with Labour unions, in their push for higher wages. However, the Forum urges all parties to consider the fact that the minimum wage negotiations also involve consequential adjustments across all cadres, including pensioners”.

“The NGF cautions parties in this important discussion to look beyond just signing a document for the sake of it; any agreement to be signed should be sustainable and realistic. 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 FAAC 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.”

If the Nigerian Governors kicked against N60,000 minimum wage, they are simply inconsolable about the signed N70,000. However, it is noteworthy that States have always resisted minimum wage. Recall that, the Governors did not support the N30,000 minimum wage. They were initially rooting for N22,500. Later, they agreed to N27, 000. The N30,000 negotiated and approved in 2019 was spurned by many States. Noteworthy is that, in 2019, the Governors asked and did get from ex-President Muhammadu Buhari, bailout funds to enable them to pay the minimum wage.

Governors have never minced words, about the need to decentralise the negotiation of a new minimum wage. They argued that States are not equally endowed, and should be allowed to negotiate with their workers’ unions at the State level, a fair, affordable and sustainable minimum wage. They claim that a national minimum wage will leave them with no choice but to owe workers or retrench them, due to a high wage bill. They said they are not elected to only pay salaries, and that the State civil servants are just a fraction of the State population. They said they have to provide infrastructure and other essential services, including security.

What many State Governments are angling for now, is financial support from the Federal Government to enable them to pay the N70,000 new minimum wage. It is unclear if President Tinubu will be willing to offer the financial succour, and for how long?

Organised Private Sector Coping Strategy

It is noteworthy, that the organised private sector (OPS), though has not uttered any opposition to paying the new minimum wage, however, many of them are unwilling. Save for the buoyant corporate organisations in the OPS, many of them are complaining of high cost of doing business, multiple taxation, and unfriendly business environment. What many of them usually do is to resort to staff casualisation, in which case their workers are not allowed to unionise and are not offered full staff benefits such as housing, transport, health, allowances, leave bonus as well as pension and gratuity at disengagement. Truth be told, many private companies have been embarking on staff rationalisation, downsizing and retrenchment, in order to stay afloat in business. Those that are not taking these draconian measures are placing their staff on half salary, or owing them a backlog of wages and emoluments.

Current Economic Realities

Truth be told, while the positions of the Governors and OPS are genuine, the economic realities every worker in Nigeria faces, is that the N70,000 new minimum wage is too paltry to improve the living standard of workers. This is because the depreciation of the Naira, has weakened the purchasing power parity of the currency. The cost of living and the dependency ratio of the average worker, has made mincemeat of the new minimum wage they are even yet to enjoy. As the price of energy such as petrol and electricity increased and food inflation stands at over 40%, while rent, school fees and cost of goods and services have skyrocketed, the new national minimum wage pales into insignificance.

What to do?

The Federal Government of Nigeria will need to subsidise energy cost, as leaving it to vagaries of demand and supply will be counter-productive.  Petrol is now being sold at over a N1,000 per litre in Abuja, and many other cities across the country. This has exponentially increased the cost of transportation. The FGN therefore, will have to continue to subsidise petrol and electricity. Nigerians are still waiting for the full implementation of the Compressed Natural Gas initiative which the FGN said is a game changer that will bring down transportation cost by about 60%, and save the country N2 trillion being spent on fuel importation every month. There should be roll out of these CNG Powered buses, so that commuters can have access to cheap transportation.

Additionally, the Federal Government needs to stop the floatation of the Naira which has led to a situation where a Dollar currently exchanges for about N1,600. If our national currency continues to be floated against international currencies such as Pound Sterling, Euro and Dollar, so will the price of commodities in Nigeria continue to soar. This is because Nigeria is import dependent, and importers of raw materials or finished products will have to charge cost-recovery prices, since they are in business to make profit. 

Lastly, President Tinubu should consider giving bailout to States that are incapable of paying this new national minimum wage. This should be soft loan, repayable over a period of time. It is also important for States and the FGN to weed out ghost workers, and reduce the size of the workforce where absolutely necessary. There is no point keeping bloated bureaucracy, in the face of dwindling resources and lack of productivity.

Jide Ojo, Development Consultant, Author, Columnist and Public Affairs Analyst

Non-Payment of New Minimum Wage by Governors: Can’t or Won’t?

Ayoade Oluwasanmi

Introduction 

On July 29, 2024, President Bola Ahmed Tinubu signed the Minimum Wage (Amendment) Act into law, setting N70, 000.00 as the minimum monthly wage for Nigerian workers, and made it illegal for any employer of labour (with certain exceptions set out in the Act) to pay their employees anything below. The minimum wage seemed to have been arrived at arbitrarily by the Federal Government, after the failure of the Tripartite Committee for the setting of a minimum wage made of representatives of the Labour Union, Organised Private Sector (“OPS”) and the Federal Government failed to agree on an amount for the new minimum wage. Almost two months after President Tinubu signed the Minimum Wage Act into law, less than a third of the Governors of the 36 States of the Federation are paying, or have committed to paying the new minimum wage.

 According to the August 22, 2024 online edition of The Nation newspaper, only the Governors of Lagos, Osun, Edo, Benue, Borno, Oyo, Nasarawa, Ondo and Adamawa had either started paying the new minimum wage, or had verbally committed to paying it. However, according to the online version of Tribune newspaper dated August 26, 2024 the Governors of Adamawa, Ondo, Osun, Lagos, Benue, Gombe, Borno and Oyo had verbally committed, or were paying the new minimum wage. According to news reports, Lagos State started paying the new minimum wage as far back as January, 2024; Edo State began paying the new minimum wage in May of 2024. I’m quite surprised that the Governors of the oil producing States, are not among those who have already committed to paying the new minimum wage. It raises the question, why are more Governors not committing to paying the new minimum wage? If certain States are able to pay the new minimum wage, why can’t others?

According to a report issued in July, 2024 by the National Bureau of Statistics, in June the Federal Account Allocation Committee (FAAC) shared N2.32 trillion among the three tiers of Government. Collectively, the States received the sum of N388.42 billion. Delta State which is an oil producing State, received the sum of N43.7 billion as its allocation for the month of June, 2024, which was the highest amount. In contrast, Ogun State received the sum of N6.3 billion as its allocation which was the lowest. Neither of these States are listed, as being among those who have committed to paying the minimum wage to their workers. These amounts are the sums received as their share from the Statutory Account, Electronic Money Transfer Levy (EMTL) and Value Added Tax (VAT). This is excluding money generated by the State Government’s Internally Generated Revenue (IGR).

 Prior to the passage of the Minimum Wage Act, the majority of the Governors had voiced their concerns about their inability to pay a then rumoured wage of N60, 000. Reports even suggested that the Governors wanted to pay N22,500 as minimum wage. Prior to the recent increase, the minimum wage had previously been increased from N18,000 to N30, 000 some years back, and quite a number of States were not even paying the N30,000. It therefore, would be impracticable or unreasonable to expect that States that couldn’t pay N30, 000 as minimum wage, to now pay N70, 000. While several Governors are saying they are unable to pay because they don’t have the financial capacity to pay, some are of the opinion that there is a lack of political will on the part of the Governors to pay the new minimum wage. The question is, which is the reason for the non-payment?

Lack of Political Will or Inability to Pay?

The phrase “lack of political will” is an interesting one. A few years ago during the Muhammadu Buhari regime, I remember reading the account of investigative journalist, Fisayo Soyombo, about how he and others went about securing the release of a friend who had been kidnapped in Ekiti State. He hired someone to track the kidnappers, and the person located where the kidnap victim was being held in a forest within the State. However, in spite of repeated visits to the then Governor, the Commissioner of Police and other officials, nothing was done to secure the release of his friend by those who swore an oath of office that the safety and security of the citizenry would be their highest priority. In the end, people had to rally round to raise money, in order to pay the ransom demanded by the kidnappers to secure the friend’s release. According to Fisayo, there was no political will to secure the release of a Nigerian citizen whose liberty had been curtailed by enemies of the State. 

To put it bluntly, lack of political will is simply a euphemism about the refusal of officials of the State to do what is right, to do their jobs. The reasons for the lack of political will may vary, but it simply boils down to the refusal of the elected to do what they were elected to do.

 Nigerians might be meek (some would say too meek), but they are not deaf or blind. They see the convoys Government officials move in. They hear of the obscenely large amounts of money, Government officials receive as salaries and allowances. They hear of the huge amounts Government officials spend on launchings and Christmas parties, or to fuel vehicles. They hear of Government officials going to the United States, Britain and Dubai, to attend parties. They hear about the schools abroad where the children of Government officials go to, while our public schools are failing due to lack of funding and they can’t afford to send their children to the private ones. While Governments try to keep governance as opaque as possible, once in a while someone leaks a document showing how Government wastes money. Therefore, Nigerians might readily arrive at the conclusion that the failure of the Governors to pay the new minimum wage, is simply down to the lack of political will. There are those who see the lifestyle of Government officials and the sums they believe are either being misappropriated and stolen, and believe Nigeria is a rich country and the Governors can afford to pay the new minimum wage.

One can hardly find any accurate data, as to the staff strength of the civil service of each State. Even if one did find any data, the question then would be, how many of these people are ghost workers. In an article written by one Japhet Alakam in the online edition of the Vanguard newspapers dated May, 8, 2017, he reviewed a book titled “Delta State Civil Service: A Sense of Gratitude” written by Onose Wilson Odafe, a civil servant who was employed by the Delta Broadcasting Service. According to the book, as at 2013, the Delta State Civil Service was 60,000 workers strong. If the numerical strength of the Delta State Civil Service remained basically the same in 2024 and the Government of Delta State decided to pay the minimum wage, and the average salary of the entire workforce of 60,000 people was N150,0000 then the wage bill for the State would come to N9 trillion per month. This sum far exceeds the N43.7 billion the State received, for the month of June, 2024. And, we haven’t factored in the amounts the Government is paying for capital expenditure or recurring expenditure, like the servicing and repayments of loan facilities to local and foreign banks and foreign multilateral organisations like the IMF and the World Bank.

 Using another example, if you typed in the words “number of civil servants in Ogun State” into the Google search engine, the first page you would see at the top is https://www.sftas.org.ng/wp-content/uploads/2022/09/OGUN-STATE_DraftReport_SFTAS-2018-APA_24March2020.pdf. However, if you clicked on the link to open it, you would get the message that the domain name has been suspended. However, a summary of the content of the suspended page before clicking the link shows that it makes reference to the State Salary Director making a report available, which shows that the State had a total staff strength of 28,707 as at December, 2018. Again, if the staff strength remained the same as at September, 2024 and the 20,000 staff were paid an average of N150,000, then the State’s wage bill would be over N3 trillion. This is far above the N5 billion the State received as allocation, for the month of June.

A caveat I would like to issue here, is that I am not privy to the accounts of any of the States in the Federation. Neither am I privy to their monthly wage bills, or the amounts generated as IGR. These details are usually kept hidden, so all one can do is conjecture and play the guessing game. However, the simple maths I have done, probably answers the question of why the majority of Governors are not committing to paying the new minimum wage now or in the future. Any increase in the minimum wage they are already paying would have to be followed by the down-sizing or right-sizing of the work force, in order for them to be able to afford it. In States where the State civil service is the largest employer of labour, that would be disastrous. However, I am not so ready to give any Governor a pass on this issue. The inability of any State to pay its workers a living wage is a problem, and leaders are supposed to find solutions to problems.

 According to United Nations criteria, anyone living on less than $2 a day, is living in poverty. With the attendant loss of value of the Naira due to inflation and other governmental policies such as the removal of subsidy on electricity and petrol, even the sum of N70,000 a month comes to less that $2 a day (about 43 cents). The question for me therefore, is not why are Governors unwilling to pay the minimum wage, but why are they not taking steps to ensure they can pay at some future date? I have identified three reasons for this.

Understanding of Purpose

The first is the issue of the understanding of purpose. The late Myles Munroe said “Where the purpose of a thing is not known, abuse is inevitable.” What is purpose? To put it simply, purpose is the “why” of anything, what it is meant to do. Why do we have governments? According to people like John Locke, the English philosopher and physician who postulated the Social Contract theory of government, people are born free but they give up certain rights to the government and take up certain obligations like the payment of taxes, in order to better ensure the stable, comfortable enjoyment of their lives, liberty, and property. To put is in simple terms, the aim of government is to ensure the benefit, safety and security of the governed.

The sad fact is that the majority of our elected and appointed officials do not know why they are in office, or what they need to do in the position they find themselves in. Every time elections come up in Nigeria, politicians promise heaven and earth to get people to vote for them. However, because we are a largely illiterate population that do not have an understanding of governance, we are easily hoodwinked by politicians. We also have to add the fact that we can be tribalistic, and exhibit a high level of religious bigotry. If that wasn’t the case, how then can you explain a candidate for Governor claiming that he will “create jobs” and people clap for him, or a candidate for a legislative position promising to build infrastructure and people take him seriously? Generally, when someone tells you he or she is going to create jobs, what they are actually saying is that they are going to ensure the employment of people in the civil service or employ people as part of some other government programme,  which is usually temporary like the SURE P programme. It is not the business of government to create jobs. Government is not built for it. The aim of government, is to create the enabling environment for the private sector to create jobs. The government helps the private sector to do this, by putting in place the appropriate fiscal and monetary policies. Also, the purpose of a Legislator is not to develop “constituency projects”, but to study society and identify the issues bedevilling it and seek legislative solutions to those problems in collaboration with other Legislators. This is achieved by seeking to pass laws, that will help remove or reduce the issues they have identified. Until political office holders truly understand that they were elected to ensure the happiness, safety, security and happiness of those who put them in office rather than the benefit of a powerful and connected few, the country cannot move forward.  

The second issue that follows on from the first, is a lack of vision by Nigerian office holders. As a result of not fully understanding why they are in the positions they occupy, Nigerian leaders are not able to envision a better future for the people they govern. The dictionary defines vision as “the ability to think about or plan the future with imagination or wisdom.” I have a former secondary school classmate and friend by the name of Gbire Boyo, who swears that Nigeria’s problem is not corruption but rather incompetence. According to him, we are saddled with leaders who do not know what to do, and are incapable of seizing the opportunities presented to them to bake a bigger national cake. I do agree with him that incompetence is one of the issues we face as a nation, but I do not think it is our greatest problem. I might be wrong.

 While I would be the first to admit that economic policy is initiated and driven by the Federal Government for economic growth, States in Nigeria do have a role to play. They also have the ability to generate their own revenue, and create prosperity for their people. When government officials hear the phrase “internally generated revenue”, it seems all they can think of is creating some new tax or levy to increase