The Federal Government has asked the Technical Committee on the Implementation of a new Minimum Wage in the country to look for additional sources of revenue to pay the proposed new wage, and the consequent salary adjustment that will follow.
The committee was inaugurated last Wednesday by President Muhammadu Buhari.
The Minister of Budget and National Planning, Senator Udoma Udo Udoma, stated this during an interactive session with the media, adding that the committee would, among other things, identify additional sources of revenue to ensure that the government could meet the increased costs that would arise from the implementation of a new minimum wage without affecting government’s ability to meet other obligations particularly with respect to the ambitious infrastructure development plans of the current administration.
A statement issued on Sunday by the Special Adviser, Media to the Minister, Akpandem James, quoted Udoma as saying that whenever a new minimum wage bill is enacted, there are demands for some wage increases even from those already earning more than the new minimum wage.
He said: “All these salary increases will impose additional costs on the government. Therefore, the committee is expected to make suggestions as to how the government can raise additional revenues to ensure that the government can still meet its expenditure on other services such as education, health, infrastructure and other important functions of the government, after paying the increased salaries.
“The committee is expected to, among other things, look at how to get additional revenues so that as our wage bill goes up, we are able to increase our revenues to ensure that our spending on capital projects, basic infrastructure, health, education and others is not reduced. In short, the committee is to advise on ways to ensure that notwithstanding the increase in payroll costs, there continues to be adequate funding for other government activities. This is not just for the 2019 fiscal year, but going forward, thereafter.”
Udoma also disclosed that government’s recurrent expenditure will rise to N4.72 trillion in 2019 from N3.53 trillion in 2018 because of its commitment to the new minimum wage and increased salaries.
“This is the reason why the President has set up a technical committee to look at additional revenue sources so that we can pay the minimum wage and the consequential salary adjustment,” he reiterated.
Speaking on budget deficit, Udoma said the government was proposing to bring it down slightly from the N1.95tn projected for 2018 to N1.895tn in 2019. This, he said, was 1.3 per cent of Gross Domestic Product and well within the three per cent limit set by the Fiscal Responsibility Act.
On the debt service to revenue ratio, the minister gave the assurance that as the nation’s revenue situation improved, the ratio would come down
The minister said: “Nigeria does not have a debt problem, as such. Our debt is within prudent limits. However, we need to optimise our revenue generating potential. This will bring down our debt service to revenue ratio. Given the size of our economy, we can, and should, be doing better, in revenue generation. This explains our focus as a government on revenues and revenue generation.”