Minimum Wage and Matters Arising

Muhammadu Buhari

Despite having signed the new minimum wage into law since April, neither the federal or state governments have implemented it, as they continue to bicker, writes Solomon Elusoji


Last April, President Muhammadu Buhari signed a new national minimum wage into law.

Even though there was jubilation among labour unions and across the country, but there were also valid fears that governments, especially those at the state level, would not (or be unable to) comply with the new baseline of N30,000.

However, on May 1, Workers Day, President Buhari said his administration placed high priority on the nation’s workers and their welfare. “On assumption of office in 2015, in spite of the daunting economic challenges, which confronted us at the time, we ensured that no worker was retrenched across the country,” he said.

On more, in his recent June 12 speech, the President reinforced his ‘socialist’ stand when he thanked “the labour unions . . for their support and cooperation with our government these last four years” and promised not to focus on helping “the privileged few but to ensure that Nigeria works for Nigerians of all persuasions.”

But responding to the sincerity (not ability) of government to implement the law earlier this month, President-General of the Trade Union Congress (TUC), Bobboi Kaigama, put his faith in the values of this current administration.

“We don’t believe government can scam the workers because I believe in the welfarism of everybody and I don’t” believe “President Muhammadu Buhari’s administration” will “scam” workers, Kaigama said.

Meanwhile, several state governments have also signified their willingness to comply with the law.

“We are very eager to pay the N30,000 new minimum wage to alleviate the plight of workers,” Bayelsa state Governor, Seriake Dickson, said, speaking for a coalition of Peoples Democratic Party (PDP) governors earlier this month.

Governor of Sokoto state, Aminu Tambuwal, has appointed a National Minimum Wage Implementation Committee Chairman. Lagos state Governor, Babajide Sanwo-Olu, has vowed to tackle the issue and the Nigeria Labour Congress in Cross River state is already boasting that the state Governor will likely be the first to honour the new N30,000 minimum pay, based on the Governor’s “body language”.

However, a coterie of southwest states have signified they will be unable to pay if the payments they receive from the government and their Internally Generated Revenue (IGR) does not increase.

Kwara State Governor, Abdulrahman Abdulrazaq, also, has said that his administration will only implement the N30,000 minimum wage after it has cleared salaries and pensions backlog. “The problems are a lot,” he said recently, “We can’t resolve them in one, two, three, four months, but we need to start resolving them.” But even he also observed: “the intention is to pay.”


Can Government Actually Pay?


There is little or no evidence that governments across the country are unwilling to pay the minimum wage. The real question is: can they?

Nigeria, both at the federal and state level, receives the bulk of its budgetary revenues from the oil sector. (some sources put it at 80 per cent).

The money goes into the federal government’s account, which then disburses funds, through the Federation Accounts Allocation Committee (FAAC), to the three tiers of government every month.

Last year, several state governors were unable to pay salaries, citing lower FAAC receipts and inadequate IGR.

So, it follows that the global price of oil will continue to play a huge part in whether government will be able to meet its new minimum wage obligations.

Last week, THISDAY reported that the “fundamentals of the 2019 budget” were “under threat as crude oil price slumped” to flatten at $60 per barrel, the same benchmark on which the country’s 2019 budget is predicated. But oil prices have a perennial reputation for being unstable; hours after the report, the prices rose by two per cent after attacks on two oil tankers in the Gulf of Oman.

Still, regardless of the price of crude oil, labour unions will continue to aggressively demand the implementation of the new N30,000 minimum wage because they believe revenue management, rather than increase, is the only reason why the government (at the federal or state level) will be unable to pay.

The corrupt looting of funds and blatant disregard for the average Nigerian worker are the reasons often cited by labour unions for government’s inability to pay salaries. In 2015, labour union leaders even advocated capital punishment for corrupt officials.

“Non-payment of salary . . . is due to the massive corruption in the country,” Kaigama, the TUC chief, had said at the time.


An economist and former consultant to the World Bank, Dr. Samson Olalere, recently acknowledged this state of affairs, while advising states on how to meet the demands of the new minimum wage.

“What is required of the governors is to cut down the cost of governance, by blocking leakages and minimising wastes,” he said.

“For instance, why will the vehicles on governors’ convoys be between 15 and 20? Why should they have bloated political appointments? Why should idle hands be kept in government service? You see six to 10 personnel employed to do the job one or two people can efficiently handle.


“All these are areas of wastage that should be blocked. The government must encourage partnership with private sector for development of infrastructures and encourage self-employment through the development of its human capacity.”


The present state

Despite having signed the new minimum wage into law since April, neither the federal or state governments have implemented it, as they continue to bicker with stakeholders.

A negotiation committee, inaugurated on May 14, has rejected the federal government’s implementation offer.

“What is happening now is that the government is dilly-dallying over the ‘table’ that will be used to implement,” General Secretary of the United Labour Congress, Didi Adodo, told THISDAY.

“They are unnecessarily wasting time. The ‘table’ that was recently done was not favourable to anybody. So we rejected it. The truth is that no administration will implement anything for the workers without a fight; so they want another fight.

“When we come out of Geneva, (the International Labour Conference is currently ongoing in Switzerland) we will convene and fight this thing once and for all.”