Nigerian governors on Wednesday insisted that they lacked the capacity to be able to pay the proposed new minimum wage of N30,000. The body also hinted that it would work on ‘another formula’ to address the wage issue.
They, however, gave two conditions that could enable them pay the amount which are: that they either sack many workers or the Federal Government reviews national revenue allocation formula.
This was the resolution of the governors at their emergency meeting in Abuja, Wednesday night.
The chairman of Nigeria Governors Forum (NGF) and Zamfara State governor, Abdulaziz Yari, read this out from the meeting’s communiqué.
Among other things, the governors said they will commission a new committee that would meet with President Muhammadu Buhari over the issue.
“Following a meeting of the Nigeria Governors’ Forum where we deliberated on the national minimum wage, governors resolved to re-strategise and put together another committee to meet with the President once again, to work out another formula towards quickly resolving the problem associated with the proposed N 30.000 minimum wage which is impracticable unless labour agrees to a downsizing of the workforce all over the country or the Federal Government itself accedes to the review of the national revenue allocation formula.
“Members of the committee who were nominated to see the President include the governors of Lagos, Kebbi, Plateau, Bauchi, Akwa Ibom, Ebonyi. Enugu and Kaduna,” Yari read from the communique.
According to Yari, the report of the Amal Pepple led Tripartite Committee presented to President Muhammadu Buhari, which recommend N30,000 as minimum wage failed to consider the submission of the governors that they could only afford to pay N22,500 as minimum wage.
“We have seen what has been presented to the President by the (Tripartite) Committee.
“As a member of the committee, our representative there said the committee did not take our submission of N 22,500 because it came late.
“I am surprised. How can you do this without the input of the states because the states are the key stakeholders in this business.
“So, a situation whereby our report was not taken or considered by the Tripartite Committee – then I don’t know how the committee wants us to work.
“But we still say we want to pay, but the issue is the ability to pay. If we say no, it is not about the ability to pay, just pay, I don’t know how this formulae will work and I don’t know how we can get a solution to the issue.
“We are paying N18,000 ( as minimum wage today), but when the President assumed office, about 27 states were not able to pay, not that they chose not to pay.
“So, now you say N30,000, how many of them can pay? We will be bankrupt (if we pay). So as Nigerians, we should look at the issues seriously.
“While other people are saying that governors are riding jets and living in affluence, that one is not luxury but compulsory.
“Like Lagos that is paying about N7bn as salaries; if you say it should pay N30 ,000, now it will be N13 bn.
“From our calculation, it is only Lagos State that will be able to pay N30,000. As Nigerians, this is our country; there is no other country we have and we should be fair to this country,” he said.
On what is the governors’ next line of action he said, “As for the way forward, we will continue to talk with Labour. Let them see reasons and difficulties some of us have.
“For instance, the money Lagos State is using to pay is not coming from Abuja. They have a way of getting their money from the IGR and that is why they can afford to pay. They get money through VAT (as well).
“Apart from Lagos, even Rivers State cannot afford to pay. So we have been crying out about this since 2011 but no one will listen .
“One critical example is that some states ration their salaries while some others put everything they earn on the table and ask labour to come and see and ask them to suggest how much should go for capital and personnel costs.
“Some say 70 per cent for personnel cost and 30 per cent for capital projects and yet the states cannot pay and they put the remaining as outstanding.”
Noting that it was wrong to use the price of crude oil in the international market to determine the minimum wage, Yari added;
“So, let us look at this matter seriously to see how we can do it properly. It is our primary responsibility to see that everybody is happy.
“It is the same labour that is pushing for the N 30,000 that will still turn around to say that the governors did not do any infrastructure and how are we going to achieve that by paying only salaries?”
Revenue in the country is currently shared under three major components – statutory allocation, Value Added Tax distribution; and allocation made under the derivation principle.
For statutory allocation the Federal Government receives 52.68 per cent of the revenue shared; states get 26.72 per cent while local governments get 20.60 per cent.
Value Added Tax revenue sharing has Federal Government getting 15 per cent; states 50 per cent and LGs, 35 per cent.
Also extra allocation is given to the oil producing states based on the 13 per cent derivation principle.
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