Discordant Tunes over FG’s Wage Increase
The new pay rise announced by the federal government last week was intended to win the support of organised labour and foster industrial harmony but the leaderships of the Nigerian Labour Congress and the Trade Union Congress believe any increase that is not derived from the ongoing negotiation is unacceptable, reports Festus Akanbi
In what has been described as a preemptive measure to outwit the leadership of organised labour, the federal government on May 1st announced a wage increase of between 25% and 30% for civil servants across various consolidated salary structures.
A statement signed by the Head of Press, National Salaries, Incomes, and Wages Commission (NSIWC), Emmanuel Njoku, said the increases took effect from January 1, 2024.
The announcement of the new pay rise not only caught the labour leaders unawares, but it also came ahead of the submission of the report of the 37-member tripartite committee on national minimum wage, led by Bukar Goni Aji, a former Head of Civil Service of the Federation (HoCS), which was inaugurated in January this year.
The new minimum wage ought to have taken effect on April 1, 2024, the old regime having expired on March 31.
This came as Abia, Taraba, and Zamfara states are allegedly still in breach of the 2019 National Minimum Wage Act which fixed minimum wage at N30,000 from the previous N18,000.
Apart from the federal government, there are indications that some state governors are already finalising arrangements to raise the salaries of their workers. Already, Edo State has announced a new threshold of N70,000 minimum wage for its workers, while Lagos said it’s waiting for the outcome of the negotiation between the labour and the federal government.
Former Governor of Edo State and a former President of the Nigerian Labour Congress, Adams Oshiomhole said what the federal announced so far was just a suggestion pending the conclusion of the ongoing negotiation between the labour and the federal government.
Oshiomhole, also a senator, believed the announcement hasn’t put a final lid on the negotiation for a new wage. He said no state government can complain it does not have enough funds to pay the new rate given the rise in government revenue under the current administration.
Critics of the administration described the 25% and 30% pay rise announced by the government as grossly inadequate given the harvest of rate increases in fuel, school fees, electricity, and customs duties, among others.
They wondered why a government that increased petrol prices by 300%, increased electricity tariff by 300%, increased customs duties by 300%, increased student fees by 300%, and whose policies increased the inflation rate to 33% and food prices by 300% will now turn around to increase the salary of workers by only 25%.
According to a social media critic, Mallam Kelots, “This is Renewed Hope and the Fixing of Nigeria we were promised! It’s 11 whole months now! No policy is really reflecting in the Lives of the common Nigerians.”
Labour Rejects New Workers’ Pay Rise
Analysts fear that rather than avert the looming labour crisis, the new pay rise was bound to push the leadership of the labour movement to confront the administration for its failure to follow the process of negotiation for new wages.
An economist, Paul Alaje, insisted what Nigeria has paid over the years has been minimum wage, not living wage, explaining that any minimum wage that is below N100,000 will not make sense given the current state of the nation’s economy.
“Since time immemorial, Nigeria’s minimum wage has been pegged between $100 to $200. So, for the sake of convenience, what labour should be looking at as minimum wage should be between N100,000 to N200,000.”
As expected, the federal government offer has been rejected by the NLC, which described last week’s wage increase as mischief.
In his official reaction, the NLC President, Joe Ajaero, said N615,000 should be the living wage for workers in Nigeria and not the 25% and 35% rise.
He said the federal government and labour should have finalised discussions on a new minimum wage for now, adding that the last minimum wage of N30,000 expired on April 18.
“We should be in the regime of new minimum wage as of today. Discussions were supposed to have been concluded. The federal government through the National Assembly legislated on it. But we saw that the discussion entered voice mail because the federal government refused to reconvene the meeting that was adjourned.
“I think the announcement now appears mischievous because there is no wage increase that the government is announcing. For them to announce it now, is an issue that we are worried about at the NLC and even at the TUC.”
The Living Wage
Ajaero, who insisted that the organised labour had agreed on N615,000 as the living wage for civil servants stated, “Living wage is such that will, at least keep you alive. It is not a wage that will make you poorer and poorer. It is not a wage that will make you borrow to go to work.
“It is not a wage that will lead you to be in the hospital every day because of malnutrition. For that living wage, we have tried to look at N615,000.”
Giving a breakdown of the N615,000 recommended, Ajaero said, “We have housing and accommodation of N40,000. We asked for electricity of N20,000 – of course, that was before the current tariff increase.
“Nobody can spend this amount currently. We have a utility that is about N10,000. We looked at kerosene and gas which is about N25,000 to N35,000.
“We looked at food for a family of six, that is about N9,000 in a day. For 30 days, that is about N270,000. Look at medical, N50,000 provided there will be no surgery or whatever.
“For clothing, we looked at N20,000. For education, N50,000. I don’t know for those who tried to put their children in private school, will not be able to cope with this amount. We also have sanitation of N10,000.
“I think where we have another bulk of the money is transportation. This is because the workers stay on the fringes and because of the cost of PMS, which amounted to N110,000.
“That brought the whole living wage to N615,000 and I want anyone to subject this to further investigation and find out whether there will be any savings when you pay somebody on this rate.”
Rising Inflation
In March, the headline inflation rate increased to 33.20% relative to the February 2024 headline inflation rate of 31.70%. Looking at the movement, the March headline inflation rate showed an increase of 1.50% points when compared to the February 2024 headline inflation rate.
Analysts said the new salary structure announced by the federal government might not be able to stave the impending labour crisis going by the level of frustration in the land.
President Bola Tinubu inherited an economy that was already struggling with record debt, high unemployment, low oil output, subsidies that drained government finances, and power shortages that have crimped growth.
His immediate reforms in the removal of fuel subsidy, unification of exchange rates, hike in energy costs, and the attendant naira devaluation have worsened the inflationary trend.
Growing Discontent
The seriousness of the situation was underscored by the alarm raised by the African Development Bank (AfDB) that rising prices of fuel and other commodities could lead to social unrest in Nigeria, Ethiopia, Angola, and Kenya.
The AfDB sounded the warning in its macroeconomic performance and outlook for 2024 in which it projected Africa’s economy to grow higher than the 3.2 per cent recorded in 2023.
In February this year, protests erupted in Niger State, Lagos, Ibadan and Abuja over the high cost of living. Nigerian authorities say they are worried after hundreds of people took to the streets of Niger State and Kano State to protest the rising cost of food.
Responding to the growing feeling of discontent, Finance Minister, Olawale Edun, speaking in Abuja during a meeting with a visiting German delegation, said the government is concerned about the surge in prices and working to fix the problem.
He blamed the recent increase in food prices on rising demand, saying the only way to address the situation is to boost agricultural production.
“The president has intervened in that sector to provide grain, and fertilisers to farmers and to bring rice, wheat, maize, and cassava under additional acreage, additional production to increase the output and thereby bring down prices and that will help bring down the inflation,” Edun said.
However, analysts said the failure of the government to end insecurity is driving farmers away from agriculture, a development blamed for the rising cost of food and tension in the country.
Analysts believed the only way the government could stave off the impending labour crisis was to give the ongoing negotiation with the labour attention and announce a wage increase that enjoys the support of all the stakeholders in the country.
