‘FG requires N12.9 billion to pay proposed new minimum wage’
The Federal Government has said that it requires about N12.9 billion to cater for the proposed N30,000 new minimum wage, which it said, had already been provided for in the 2019 budget.
The explanation comes amid suspicion by the organised labour that the government wanted to renege on the new minimum agreed by a tripartite committee by setting up another technical committee to look into ways and means to fund the new minimum, which bill is expected to be transmitted to the National Assembly on January 23, 2019.
But at an interactive session with editors in Lagos on Friday, the Minister of Budget and National Planning, Senator Udo Udoma, and the Director-General, Budget Office, Ben Akabueze, took turn to explain the controversies surrounding the new minimum wage proposal.
Udoma, who reiterated government’s commitment to paying the new minimum wage, said: “We have already provided for it in the recurrent (non-debt) spending expected to rise by 34.17 per cent from N3.52 trillion in 2018 to N4.72 trillion in 2019, (reflecting increases in salaries and pensions, including provision for the implementation of the new minimum wage).”
Clarifying the appointment of the Bismack Rewane-led 22-member technical committee, which many believe is a duplication of efforts, Akabueze explained that the move deals mostly with the aftermath of the consequential adjustments.
Meanwhile, Udoma, who insisted that Nigeria could achieve the 3.1 per cent Gross Domestic Product (GDP) growth projection in its 2019 Budget of Continuity despite the 2.2 per cent estimate by the World Bank, said the 3.1 per cent target is based on the optimism of current economic realities in which oil production is anticipated to remain steady at 2.3 million barrels daily, adding that Nigeria has the capacity to actually do 2.5 million barrels daily.
The minister and Akabueze also used the opportunity to explain other knotty issues, including the exchange rate, sale of remaining power assets and repetitions of items in the yearly budget.
With regard to the exchange rate in which the Brettonwood institutions continue to clamour for a unified rate for the benefit of all, Udoma told The Guardian on the sideline of the interactive session that the Central Bank of Nigeria (CBN) sells dollar to the government at N305 per dollar, while it sells to the private sector at N360.
“Government buys at N305. This is because the Federal Government has a lot of responsibilities, especially with the provision of infrastructure and other amenities. It is not true that government buys dollar at lower rate.
“If the rate at which the CBN monetises government’s dollar receipts is higher than N305/$, there will be an exchange rate gain, which is also remitted to the Federation Account by the CBN,” he said.
Besides, he said the repetition of items in the yearly Appropriation Bill were not intended to defraud as popularly believed, but done due to the nature of the items or projects, amid budgetary constraints arising from inadequate funds.
Akabueze said: “If you do your family budget year after year, you’ll be amazed at how many items will reoccur. No agency buys all the cars that we need in one year because there are not really enough resources. Again, since not all the cars are bought the same year, the cars will be replaced as and when they fall due. So, the fact that you see vehicles every year doesn’t mean they are the same items.”
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