The news could not have come to her at a better time. Comfort Ogri, who recently lost her husband, has been pondering over how to sustain herself and five children on her meagre salary of N10,000 per month as a non-teaching staff at a private secondary school in Lagos. Even before her husband’s death, she had incurred huge debts mostly on hospital bills. But with the news that the Senate has fast-tracked the passage of the bill to amend the national minimum wage to N18,000, Ogri is looking forward to better days ahead as she expects her salary to be increased to adequately cater for her children.
Also glad about the turn of events concerning the minimum wage, Anne Oluwole, a principal in a public secondary school in Abeokuta, Ogun State, is of the view that the standard of living of Nigerian workers would be enhanced. She is particularly happy for teachers in the public service who are poorly paid. She confirmed to the magazine that many of her teachers are constantly in debt, juggling their salaries in an attempt to make ends meet, but with little success. “Based on the reality of our economy, especially with the way prices of commodities keep skyrocketing, it is always very difficult for people to buy essential goods for their household, without much strain on their purse. Many of my staff are in one cooperative society or the other, so as to avail themselves the opportunity of borrowing funds to meet basic needs, but I hope with the new salary structure, it will improve their living conditions,” Oluwole explained.
Peter Udoh’s situation is pathetic. The only son of an aged mother, he had to do menial jobs to keep himself in school. Recently, he was employed as an office assistant in a media outfit, based on a salary structure of N12,000 monthly. The money is barely enough for his transportation to the office every month, yet he had to contend with feeding himself, his mother, cater for his needs in school. But if all goes well, and the new minimum wage takes off, Udoh and many others in his shoes would have cause to smile, as their salary would be jacked up.
Just like the aforementioned, many Nigerians who are lucky to have jobs, but find it increasingly difficult, if not impossible, to survive on their monthly wages, are waiting with bated breath for the federal government to sign into law the bill on the minimum wage. The Senate, recently passed the bill to effectively raise the national minimum wage from N7,500 to N18,000 based on an agreement reached by the tripartite committee made up of labour unions and government officials and headed by Justice Alfa Belgore. The executive members of labour are convinced that N18,000 is a far cry from the N52,200 they demanded, but they had to sheathe their sword and accept the recommendation of the Belgore-led committee, which pegged the minimum wage at N18,000.
Unfortunately, the deal might hit a brick wall, as governors in the various states of the federation are threatening to back out of the new minimum wage agreement, unless the federal government reviews the existing federal revenue allocation formula. Under the sharing formula, the federal government allocates to itself 52.68 per cent of the federal revenue, while states get 26.68 per cent. The 774 local governments are left with 20.50 per cent, while oil-producing get 13 per cent from the allocation as derivation fund. The governors, under the aegis of the Nigerian Governors’ Forum, NGF, at their meeting two weeks ago, were vehement in their demands that the current revenue allocation must be reviewed; otherwise they would not be able to pay workers the expected N18,000. To press home their demand, the forum set up a six-man committee headed by Babatunde Fashola, Lagos State governor, with the mandate to review the 1999 Constitution, whereby the federal allocation will be reviewed.
Ironically, the man heading the committee has agreed to pay the minimum wage to workers in Lagos State. The payment took effect from January. With the new payment, seen as over a 100 per cent increase, a director in the state service on Level 17, will be earning about N4.5 million annually, (N375,000 monthly) while a worker on Level 12 will be earning between N1.2 million annually (N100,000, monthly). Adams Oshiomhole, Edo State governor, has also promised to increase the wages of his workers to a sum not less than N18,000 when the federal government passes the law for the minimum wage.
However, the bulk of the governors have stated emphatically that they might not be able to pay the new minimum wage. Their refusal to embrace the new minimum wage policy has ignited the fury of labour unions. At the delegates conference of the NLC held in Abuja, last week, the union said it would do all in its powers to force the state governments to assent to payment of the new minimum wage, since they too were part of the tripartite agreement that lasted for years.
Nigerians are wary of the threats being issued by the Nigerian Labour Congress, NLC, known for its penchant of bringing the country to a standstill through its strike actions. Last November, Nigerian workers downed tools over government’s reluctance to honour the tripartite agreement on the new minimum wage. The action was on for three days until it was eventually suspended. According to Abdulwaheed Omar, president, NLC, “This is not the first time that workers would be asking for a general upward review of wages and an increase in the national minimum wage. Between 1945 when workers staged the famous 45 days general strike for a Cost of Living Allowance, COLA, and 2007, when the demand won by workers for a 25 per cent general wage increase through the Ernest Shonekan Wage Consolidation Committee was arbitrarily cut down to 15 per cent by Olusegun Obasanjo, workers have struggled 15 times to have wages improved and a national minimum wage legislated upon.”
Citing the rationale for the labour’s demand for upward review of workers’ wages, Omar said, in the last one year, inflation has intensified with the cost of living index in the urban area increasing over 14 per cent. According to him, the disproportionate increase (20.9 per cent) in the cost of food means that the erosion in the real wages and salaries of workers is alarmingly severe. “The process of monetisation and consolidation in-kind benefits, which were hitherto not taxed has resulted in an escalation of the tax paid by workers. This has further depressed the real take home pay of workers,” Omar said.
He is convinced that the various governors can conveniently pay the new minimum wage. “The problem in Nigeria is massive corruption by members of the political and administrative elite and not lack of resources. To be sure, paying the new minimum wage will require that members of the political class cut down their level of public funds,” he opined. Ismail Bello, NLC secretary, Lagos State, sees the implementation of the minimum wage as having immense benefits to the Nigerian economy as it would translate into increase in the purchasing power and effective demand of workers. He said this would in turn lead to increase in the demand for goods and services, translating into growth for the economy.
Experts, however, warn that any increase in wages at this point in time will automatically lead to increase in inflation rate, as there would be too much money in circulation. “When those traders in the market hear that civil servants’ salaries have been increased, they too would jack up their prices, claiming they want their own share of the government’s windfall,” says Oluwole. Niyi Adelaja, senior consultant, Soft Alliance and Resources Limited, an Oracle-certified company based in Lagos, said he fears a boomerang concerning the wage increase. According to him, those in the public service are the ones who will benefit greatly from the minimum wage, but those in the private sector would have to negotiate their wages, and in most cases, when they force it, they could have their employment terminated. He also fears that wage increase would have a negative effect on infrastructural development and the development of other vital sectors like education, health, and many others as the capital expenditure of states would be reduced to cater for the salaries of public servants and administrators.
But Bello debunked such thoughts. Said he: “For me the argument that wages push up inflation is completely outdated. The reality is that our economy itself is already showing an inflationary trend, we are import-dependent and with an unstable naira, your bet is as good as mine in terms of prices of goods.” He also believes that wage increase should be national, as it would alter entirely the wage structure in all sectors. “What I mean is that there are quite a lot of private groups that are earning more than N18,000; there are quite a number of others who are taking less than N18,000; subsequently, they can then negotiate where they want to be. For those who are already taking N18,000 it means they can negotiate their wages upward,” Bello counseled.
Joe Ajaero, general secretary, National Union of Electricity Employees, also sees the steps taken to enforce an increase in the minimum wage as “a step in the right direction.” For him, if the economy can accommodate the huge sums spent on political office holders, it can accommodate a general upward review of wages and salaries.
Kazeem Akeem, chairman, Trade Union Congress, TUC, while commending the Lagos State government for accepting to pay the new minimum wage, called on the federal government to enact the enabling law to give legal backing to the enforcement of the minimum wage by all employers of labour. While many workers are anticipating the N18,000 minimum wage regime seen as a milestone, it is, indeed, a far cry from the workers’ demand for N52, 000 as minimum wage. With the anxiety over the reaction of governors who are foot-dragging over the payment of the minimum wage, Nigerians hope there would not be another round of strikes by the labour movement as they have threatened to do all within their powers to make the country ungovernable should government renege on its promises. Coming shortly before the forthcoming pools, there is a growing concern over the possibility of labour unions paralysing the country.
Additional report by Femi Morgan
Ogri: Looking forward to better days
Oluwole: Hopes new salary structure will improve workers’ welfare
Fashola and Oshiomhole: Agree to pay the minimum wage
Adelaja: Fears a boomerang effect on wage increase
Bello: Disagrees wage increase will push up inflation
Ajaero: Minimum wage increase, a step in the right direction
Akeem: Commends Lagos government for paying new wage
Nigerian workers: Waiting for Godot?
Omar: Convinced governors can conveniently pay new wage