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Minimum wage and Governors’ quest for revenue review

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With table set for implementation of N30,000 newly approved minimum wage, state governors have renewed agitation for review of existing revenue formula. Abdulwahab Isa reports


In the past weeks, it is assumed that the leadership of the organised labour scored a major victory for itself.

The major labour centres, Nigeria Labour Congress (NLC), Trade Union Congress (TUC), United Labour Congress (ULC) and even the Nigeria Employers’ Consultative Association (NECA), earned a thumb up in the concluded fierce negotiation that earned Nigerian workers an upward review in basic salary to N30,000 from N18,000.

Whereas, labour and government operate on well structured template in other organised societies, it is entirely a different setting in Nigeria. Here, government is ‘stingy’ when it comes to issue of pay review for workers. No wage increment has ever been achieved without workers going into trenches with government.


Battle for new minimum wage

The current pay rise for labour like ones before it was a hard fought battle. It became apparent government, represented by the Ministry of Labour and Employment, wasn’t keen in implementing a pay rise.

While Federal Government was ready to implement a pay rise after series of back and forth negotiations, the state government had contrary view. The stage was set for an apparent confrontation.

Organised labour insisted on N30,000 as the new minimum wage, state governors offered N22,500 as their minimum wage benchmark. In several press briefing by President of NLC, Ayuba Wabba, stood his ground.

He argued that N30,000 had been decided and resolved by members of the committee, wondering why some members would want to renege and backtrack from the collective decision.

“More than 50 per cent of the stakeholders have signed the report and there was no disagreement; that is the point I want people to realise,” he insisted. “No one can dispute the fact that the signature part of the report document has been signed by members,” he said at the heat of negotiation.

The NLC boss explained that the reason some other members of the tripartite committee did not sign on that day was because it was getting late and they offered to do so later.

“We say with confidence, let the president make the report public so that the matter would be laid to rest and so that Nigerians will know who is lying. For us, we remain resolute on our position on the issue of new minimum wage,” he said.

He frowned at the alleged move to create division within the ranks of the organised private sector by getting an insignificant segment to cast aspersions on the diligent work done by the tripartite committee.

“NECA was also there at the negotiations and I am sure they will issue a formal statement to confirm what we are saying,” he said. “So this issue of threatening the organised private sector and trying to divide their rank and file will not work.”

By law, Wabba said a new minimum wage ought to be in place every four years and that the N18,000 minimum wage had expired since 2016.

“The legal implications of continued delay in fixing a new minimum wage is that government is already in breach of the law,” he said.

N30,000 in perspective


President Muhammadu Buhari did the needful recently by signing the N30,000 National Minimum Wage Bill into law, thus ending prolonged anxiety caused by the delay.

The Senior Special Assistant to the President on National Assembly Matters (Senate), Senator Ita Enang, who broke the news to State House correspondents, said the N30,000 to workers would begin immediately effective from April 18, 2019.

“This makes it compulsory for all employers of labour in Nigeria to pay to their workers the sum of N30,000,” Enang said. “And this excludes persons who are employing less than 25 workers; persons who work in a ship, which sails out of jurisdiction and other persons who are in other kinds of regulated employment, which are accepted by the Act.

“It also gives the workers the right, if you are compelled by any circumstance to accept a salary that is less than N30,000, to sue your employer to recover the balance and it authorises the minister of labour and any person nominated by the minister of labour, or any person designated by the minister of labour in any ministry, department or agency to on your behalf, take action in your name against such employer to recover the balance of your wages.”


He noted that the signing of new minimum wage by the President “also ensures and mandates the National Salaries, Income and Wages Commission and the minister of labour to be the chief and principal enforcers of the provisions of this law. And this law applies to all agencies, persons and bodies throughout the Federal Republic of Nigeria.”



Governors’ clamour


With the signing of new minimum wage, state government, even the ones defaulting on N18,000 minimum wage, reluctantly agreed to implement the N30,000.

At the last count, most states have expressly said they will implement the new pay. The governors are, however, clamouring for review of revenue formula.


The fresh demand is being pushed through the Nigerian Governors’ Forum (NGF) platform. They had before now asserted that current realities made it extremely impossible for most states to effect pay rise.


The governors had given two conditions upon which to pay the proposed N30,000: a review of the sharing formula that will see them get more money or downsize workforce, claiming that accepting to pay the new wage without fulfillment of the conditions would make the states go bankrupt.


The prevailing revenue formula gives Federal Government 52.68 per cent, states, 26.72 per cent and local governments councils, 20.60 percent and 13 per cent ceded to oil producing states as derivation fund.


Although conclusively a decision on N30,000 had been ratified and binding on government across the three tiers, the Federal Government agreed to take states’ request for a review of revenue formula to the National Economic Council (NEC).



Imperative of alternative revenue sources


Apart from Lagos, Rivers and Kano states, whose internally generated revenue ( IGR) is sufficient to drive governance, every other state relies on federation account.

The monthly fund from the federation account isn’t sufficient for administering the states. To exit the current cash quagmire facing states, they have to explore alternative revenue sources. The current poor state of IGR must be improved upon.

Agriculture and other sources of wealth lying fallow across states have to be tapped into and be maximally improved upon as sources of additional wealth.


Last line

For countries that are richly blessed in Nigeria’s mould, N30,00



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