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Governors and the minimum wage




The instant uproar by workers union against a seeming tentative suggestion by state governors to trim down the minimum wage came as no surprise. The questions immediately thrown up by that suggestion have always been begging for answers.

What, for instance, can the current N18, 000 minimum wage buy for workers? Can governors honestly seek a cut while they maintain their own lavish lifestyle? Should all the states be bound by a common law regarding emoluments of their personnel? And what right has a governor to remain in the saddle even when he is unable to pay workers’ salaries? In other words, does it not amount to failure of responsibility on the part of a leader, in this instance a governor, who cannot manage the state ship financially?

Until state actors submit themselves to sincerely respond to the posers, and specifically look inward to correct multiple anomalies prevalent in their domain, so would they contend with the disequilibrium of their finances. Governors also need to be reminded that wrong or simplistic prescription to their problem of cash crunch may elicit very adverse consequences.

No doubt, the reality that Nigeria is broke is dawning too late on the 36 states’ governors who, the other day, met in Abuja under the aegis of Nigerian Governors Forum (NGF), reviewed the fiscal status of the country including their respective states and came to the realisation that the continued payment of the minimum wage of N18, 000 was no longer feasible. The immediate rationale for this position is the dwindling monthly allocations occasioned by dipping crude oil price. When the current minimum wage was agreed upon and formally enacted into law, oil sold for $126 as against its present $41 per barrel.

Expectedly, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) have respectively warned that given the massive devaluation of the naira as well as spiralling inflation, it would be unthinkable to tamper with the minimum wage signed into law in 2011.

Besides, the Minimum Wage Act was informed by cost of living and not necessarily based on the fortune of oil. Therefore, it would not be subject to the whims of public officials. They threatened that if the minimum wage was reduced, they would wield the enormous power of the workers, shut down the country and make it ungovernable. They challenged governments to reduce cost of governance at all levels so that resources would be freed for vital government responsibilities.

This matter should be examined beyond the superficial, such that wage is determined in relation to productivity. What is the worker being paid for and what is the worth of N18, 000? Is it difficult to diversify the economy in a way to terminate states’ dependency on Abuja where they visit regularly to collect the statutory monthly allocation from the Federation Account? Isn’t it unfortunate that the governors have suddenly recognised their precarious position and are now contemplating how to diversify the economy? What happened to the idea of diversification of the economy in the days of boom?

The bare truth is that the states are coming from a background of waste and need to return to productive governance. Expenditure must be synched with available resources. It is well that the governors have said so and this is the time to walk the talk. They must enhance revenue generation through cut in overhead costs arising from superfluity of political office holders, the award of bloated pension to public officials, payments to non-existing, or ghost workers, and other sundry patrimonial indulgences.

It is disheartening to note that federal largess has turned the states into resource gulper and arena of leaders without ideas on how to create wealth and govern responsibly. Balanced budgeting is to be preferred to a deficit one. Nigerians can no longer tolerate the habit of waste.

Certainly, state governments have failed woefully in the discharge of their responsibilities. When an employer is unable to meet its obligations to its employees, it has failed. Leaders are meant to solve problems and leaders who cannot solve problem are a liability.

The Federal Government can ill afford to bail out any state anymore; not when many of them are investing in misplaced projects such as airports which are hardly their most compelling infrastructural need in these lean times. The situation in which workers are being owed backlog of salary is an emergency issue that should command the utmost attention of governments in the country. If the country is not working, it is due to the awkward structure of the Nigerian state.

In the short term, the National Assembly should pass a law to allow the Federal Government deduct at source loans already advanced to states as bail out. The governors are shamelessly waiting for a better tomorrow, bereft of ideas on how to turn around their current fiscal predicament. Yet, the reality of the country is that yesterday is always better than today. To wait idly for a better tomorrow is to rot on the altar of hopelessness.

Restructuring is a long-term cure-all solution. True federalism is the only way to creatively unlock the potentials of the country. Skewed federalism is central to the country’s economic and political problems and its remediation is the cure.

While the current minimum wage is by far too low, in a re-federalised Nigeria where its component units would enjoy fiscal autonomy, states can negotiate their salary as well as fix their minimum. As first step, the provisions of the 1999 constitution (as amended) on the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) must be amended in ways that it fixes wages only for the Federal Government and allow states appropriate legal institutional structures for doing same.

Many are endowed with mineral deposits, which they can exploit for solvency. Fundamentally, the laws inhibiting the independence of the state should be reviewed and expurgated where odious to the smooth running of public affairs.

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