N56, 000 minimum wage… the reality of Nigerian economy
The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have made a formal proposal to the Federal Government to increase the minimum wage from N18000 to N56000. The decision was made at the time most states are struggling to pay salaries. AJIBOLA AMZAT (Features Editor) examines the possibility of implementing the new proposal.
The Vice President of the NLC, Comrade Issa Aremu, was smiling even as he was speaking on the breakfast programme, Sunrise Daily, on Channels TV last week. But the smile appeared forced because the subject of discussion was not a laughing matter. It was a matter of economic survival of the Nigerian workers whom Aremu speaks for.
The NLC leader could not reconcile the inability of the state governments especially to pay a minimum of wage of N56,000 while many state governors meet “lousy obligations” such as paying their predecessors undeserved salaries.
Aremu’s interview was conducted on the wake of the recent proposal of N56, 000 minimum wage by NLC and TUC.
The Unions’ proposal is informed by the labour law which stated that wages for workers must be reviewed after ever five years.
And since the last review of the national minimum wage was done in 2010, the time is ripe for another review.
At N18, 000 minimum wage, Nigeria ranks alongside Vietnam, Lesotho, Sierra Leone and other low-income paying nations, according to Wikipedia, whereas countries such as Brazil pay $218 minimum wage per month, Egypt, $174 and South Africa $155.
The President of the NLC, Mr. Ayuba Wabba told reporters last week the 18,000 Naira minimum wage was negotiated when the exchange rate at that time was almost at N110 to the dollar. Currently, the official exchange rate is pegged at N199 to the dollar, meaning the minimum wage per month in Nigeria is $90 as against $115 it was five years ago.
There are also the issues of inflation and purchasing power, among others.
So the labour leaders think the wage increase is only a matter of necessity and legality.
“With N18, 000, you can’t drive this economy with this kind of miserable pay,” Aremu insisted.
Interestingly, the union’s demand is coming at a period when government at all levels are facing a cash crunch. Crude oil, the country main source of revenue, has been suffering low price since last year.
Currently, the price stands at $37 at the international market whereas it was sold for around $77 in 2010 when N18000 minimum wage was signed.
Therefore many states have been unable to pay salaries as at when due and have resorted to payment in percentages ranging from 25 to 50 per cent salaries.
In a report published recently by Budgit a civic organization that monitors governments’ budgets and public spending, 50 percent of the states in Nigeria are unsustainable within the current economic paradigm.
The report warned that the affected states would go bankrupt sooner than later except they shore up their revenue base.
Recall that the Federal government has rolled out bailout fund two times for several states before they could pay the outstanding salaries in the previous months. There are reports that more of such financial support is still expected in the days ahead.
President Muhammadu Buhari has promised the governors last Thursday that more money would be made available to states so that they can pay workers’ salaries owed since the beginning of the year.
With the burden of additional wages, most states may find it even more difficult to meet their financial obligation.
But the NLC has already warned that any governor that fails to pay the new wage is breaking the law of the land and such governor should resign from his position.
Meanwhile, Adams Oshiomhole, the governor of Edo State has increased the national minimum wage to N25, 000. This, of course, falls short of N56000 by 31,000.
But other governors are still keeping quiet.
Abia State Governor, Dr. Okezie Ikpeazu told the workers yesterday that despite the economic situation, he remains resolute in his commitment to the welfare of workers and re-emphasized his position that “ worker’s wages are not something that workers should be asking for but something that must be taken for granted”.
He assured the workers that he is making every concerted effort to improve on their entire working environment and conditions including their emoluments, pension, and gratuities. But he was not forthcoming whether he would consider the upward review of the workers’ salaries.
Rivers State Governor, Nyesom Wike was also noncommittal. He said, through his Special Assistant on Electronic Media, Simeon Nwakaudu, that Rivers workers would continue to enjoy a key position in his administration because he considers them critical to the attainment of set goals in the state’s development agenda. And that was all.
The Imo State governor said he had conceded seventy percent of the total income of the State every month to the leadership of the Nigeria
Labour Congress for the payment of Salary and Pension, while he was left with only thirty percent for Capital projects just to make the workers happy.
No state governor is willing to commit the government yet. The state of finance in most states may affect the way the federal government would also negotiate, experts say.
Former National Secretary of the Labour Party (LP), Mr. KayodeAjulo blamed the problem on the present revenue sharing formulae. According to him, it is antithetical to te federal structure.
He said “the unthinkable amounts of allowances accrued to federal aids and appointees and the unreasonably high cost of presidential trips, predicated upon the numbers of practically useless aids paraded on such trips, to mention but a few.
Meanwhile, a faction of the Nigeria Labour Congress, NLC, led by Joe Ajaero, has rejected the N56, 000 national minimum wage by the Ayuba Wabba-led NLC and Trade Union Congress of Nigeria, TUC, saying the figure does not reflect the economic realities facing Nigerian workers.
At a pre-May Day symposium, titled, “Inclusive Socio-Economic Space for Sustainable Development”, Ajaero said with the current exchange rate of the Nigerian currency, N56,000 wage would be small.
“No sacrifice is too much to liberate the Nigerian workers. Every year, we go to the stadium to salute those who have been enslaving us, those who have refused to pay us minimum living national wage.”
With these discordant tunes within the labour union, observers wonder if this may not affect the interest of the workers in the end.
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