Review… The looming minimum wage war. How it will be fought

In from Ali Smart

The nation has been spared labour unrest for some time now. But that may soon change as may soon change if governors of the 36 states of the federation under the auspices of the Nigeria Governors’ Forum (NGF) make good their threat to stop payment of the N18,000 national minimum wage.

It would be recalled that in March 2011, the N18,000 minimum wage was signed into law by the former president Goodluck Jonathan when the nation was experiencing relative boom in the oil sector at a time a barrel of oil was sold at $126, quite a contrast to the current price of $41, a development which has led to dwindling oil receipts and ultimately affected monthly allocation from the federal government to the states.

Most of the states apparently were not prepared for this, so they were caught off guard by this harsh reality and they went broke.

Many states could not pay workers’ salaries for months; states like Osun, Ebonyi, Benue, Plateau and Oyo were mostly hit by this reality.

At a point in time, these states owed their workers up to nine months salaries, a situation which the federal government had to wade into by giving bailouts to rescue the states.

Crux of the matter
Chairman of the Governors Forum, Governor Abdulaziz Yari had last week said the N18,000 National Minimum Wage promulgated into law in 2011 was no longer sustainable because of the fall in the price of crude oil.

While making a case for the review of the minimum wage, Governor Yari said matter-of-factly: “The situation is no longer the same…. And we have not seen prospects in the oil industry in the near future. We will diversify our economy in the area of agriculture and mining.

“But at the same time, we should understand our situation where some of us (states) today are taking N100million take home (monthly allocation) and then have salaries in particular of over N2billion to pay. We therefore agreed here to take this suggestion to NEC in our meeting.”

Mixed reaction
Edo state governor, Comrade Adams Oshiomhole who was part of the negotiation believes that it was out of place for any of the governors to question the wisdom behind the payment of the N18,000 minimum wage to workers.

While some of the governors who claimed that they cannot pay the minimum wage argued that it was imposed on them by the federal government, Oshiomhole said it was not imposed on the government but rather it was a product of agreement between government and labour.

Read also: Again, govs besiege Buhari for bailout

Oshiomhole who is a former President of the NLC, said at a meeting of labour leaders in Abuja that democracy must not be run at the convenience of state governors.

“I’m a labour man, I have been clear with my colleagues in seeking to find solution to the problem we face. We have to be holistic. We cannot at one hand question the wisdom behind the national minimum wage. I joined the NLC to protest to the National Assembly when they were going to amend the constitution to make the minimum wage a concurrent issue. I said workers have a stake in this democracy. They are the ones who could afford to march the streets and they march the streets for democracy,” Oshiomhole said apparently in support of his old constituency.

Not done, he added for emphasis, “I believe when you look at the minimum wage, as it is today at N18,000, it is less than 100 dollars. I think it is now about eighty dollars. Now, divide eighty dollars by 31 days, you will be getting about two point something dollars. Now we cannot argue that workers in Nigeria’s formal sector should not earn more than two dollars a day, I cannot subscribe to that because the heart of governance is the welfare of the people.”

Expectedly, the Nigeria Labour Congress (NLC) President, Ayuba Wabba who was furious about the claim by the governors gave an indication that the workers will shut down the states if the governors attempt to reduce workers’ salaries, arguing that the N18,000 which the governors are claiming they cannot pay, is not enough to take the Nigerian worker home at the end of every month.

He said “we reject it in its entirety, Nigerian workers will not take it lightly. We are not the problem, rather we are the solution. The problem is that they have not been able to reduce the cost of governance. They should go and reduce their security votes. Let them also cut down on the number of their entourages. They must also be accountable to the citizens that voted them into power. “We are going to resist any attempt to tamper with the payment under any guise. Let them also note that the N18,000 was not allocated, it was negotiated through a tripartite process and it is a product of law that is even due for review. We are going to champion the review. Let us also put them on notice, if attempt is made to reduce, review or do anything outside the legal minimum of N18,000, which cannot even take us home, we are going to resist it. Nigerian workers will be mobilised to resist.”

The NLC boss who recalled that labour had as early as May 2015, gave notice that the N18,000 National Minimum Wage was due for review, and was prepared to submit a new proposal once the incoming government settled down, said they were pained that the government of the day was trying to introduce an unpopular decision.

His counterpart at the Trade Union Congress of Nigeria, Boboi Kaigama also shared the same sentiments.

Like Oshiomhole, Kaigama explained that the N18,000 minimum wage was agreed at a tripartite meeting involving government at all levels, employers through Nigeria’s Employers’ Consultative Association (NECA) and the organised labour.

Also reacting to the claims by the governors, a nongovernmental organisation, Coalition Against Corrupt Leaders (CACOL), accused the governors of trying to increase the unemployment and poverty level in the country.

The group’s Chairman, Debo Adeniran believes that such an action will result in large scale corruption in the public sector and lead to an increase in crime.

He said the state governors should as a matter of priority, declare economic emergency in their states in order to remove unnecessary and irrelevant projects affecting wages in their respective states and not use the state of the nation’s economy as an excuse for reducing the minimum wage or downsizing their workforce.

The states, he emphasised, “should also look inwards and find ways to harness the abundant human and natural resources that every state is blessed with. They should also endeavour to cut down on basic running costs and put a check on corruption and other practices that impact on their finance. It has often been said that the dependence on oil revenue is inimical to the economic growth of the country. Non-oil sectors of the economy should be harnessed.”

Echoing similar sentiments, Prof. Ango Abdullahi, a Professor of Agriculture and former Presidential Adviser on food Security believes that governors who cannot pay the minimum wage owe Nigerian workers an apology.

While describing the claims as irresponsible, insensitive, embarrassing and unacceptable to Nigerians given the huge amount they and their retinue of aides pocket monthly, the former Ahmadu Bello University Vice Chancellor was quoted as saying that it was a thing of displeasure that governors, who were taking billions of Naira monthly under the guise of security votes, which they don’t account for, could wickedly refuse to pay their workers a worthless minimum wage of N18,000 monthly.

A cross-section of experts and analysts while airing their views on the purported plan to end the minimum wage, argued that a downward review at this point in time is calling for prolonged strike action which will no doubt cripple activities across the federation.

You may also like: Govs diverting bailout funds, NLC cries out

“Even though many of the states have had to rely on a bailout fund from the federal government to pay salaries of workers, some of who are still yet to be paid, it is evident that the governors are not ready to improve on their internally generated revenue, but to go cap in hand every month to the federations account for handouts to administer their states,” Aliu Masari, a public policy analyst stressed.

Investigation however revealed that during the negotiation for the current minimum wage, some of the state governors had offered to pay far more than the N18,000 while others offered far less.

It was learnt that Abia State under Theodore Orji for example offered to pay N46,700, Kebbi State under Saidu Dankigari proposed to pay N30,000, Imo state under Governor Ikedi Ohakim proposed N30,000 and Kwara state under Senator Bukola Saraki now Senate President proposed to pay N30,000.

Also, Bauchi State under Isa Yuguda accepted to pay N16,585.50, the Federal Capital Territory proposed N25,000, Zamfara proposed to pay N15,000, Jigawa proposed to pay N20,800, Plateau proposed to pay N10,000, Anambra N25,000 while Ebonyi proposed to pay N10,000. Akwa Ibom State proposed to pay N13,333.12 and Kano State N11,022.17. This, however was before the tripartite committee agreed on N18,000 as the national minimum wage.

Analysts believe that the over dependence on oil revenue and massive corruption in the system is affecting the ability of the states to pay living wages to workers. Investigations revealed that many of the states cannot generate enough revenue to augment what they receive from the federations account.

At the recently concluded 21st Nigeria Economic Summit, participants agreed on the need to look inward and improve on
their internal revenue, while blocking leakages in the system. This they agree can avert the looming economic breakdown that may arise from workers downing tools in protest over attempts to reduce their wages, or its non-payment.

#Whatdoyouthink: Are the governors justified in seeking for reduced workers’salaries?

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now