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Minimum Wage: Tripartite Committee urges Organised Labour to be realistic about demand(s)

*The Tripartite Committee comprising the Federal Government, State Governors and Organised Private Sector advises the Labour Unions to take a holistic look at its offers(s) in relation realities in the economy, stating any amount above N60,000 Minimum Wage may compel most states and local governments to sack workers, spend almost all of their Internally Generated Revenue and Federal allocations on salaries, and even borrow to pay workforces

Isola Moses | ConsumerConnect

In anticipation of the Nigerian Government’s final decision on the new National Minimum Wage, the Tripartite Committee comprising the Federal Government, State Governors and the Organised Private Sector (OPS) has urged the Organised Labour to take a holistic look at its offers(s) as regards the realities on the ground in the economy, and efforts of the government and other key stakeholders in the negotiations thus far.

ConsumerConnect reports the Federal Government in the last offer had suggested N62,000 as the Minimum Wage, but several State Governments and Local Government Councils (LGCs) have expressed their opinions on the offer.

Bundles of new Naira notes

However, in reaction to the offer, the Organised Labour consisting of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) expressly rejected the Tripartite Committee’s N62,000 proposal to the Federal Government.

Instead, the Labuor Unions said they would rather press for “at least” N250,000 as new their new Minimum Wage.

They yet insisted to not to accept any lean addition to the figure from the Nigerian Government.

On the flipside, reports also indicated that several states across the Federation noted they might may not be able to pay N60, 000 let alone N62,000 to their workers.

As Nigerians await the ultimate decision on the much expected new wage for workers, a report by the Federal Account Allocations Committee (FAAC) on states’ earnings and expenditures before and after the removal of fuel subsidy might have strengthened their position in this regard.

N62,000 Minimum Wage offer reflects prevailing economic realities: Government

Despite the Labour’s rejection of the N62,000 as the Minimum Wage, the Federal Government reportedly, has stated that the amount yet reflects the prevailing economic considerations and its non-monetary incentives the implementation of which has started since the beginning of 2024.

More so, a recent report attributed to Goni Aji, Chairman of the Tripartite Committee, noted that any “wage increase above N60,000” for most states in Nigeria is unsustainable.

According to the report, several States and Local Government Areas (LGAs) may have to disengage workers to be able to pay anything above that amount.

Besides, the implication of the Federal Government’s agreeing to anything above N60,000 Minimum Wage is said to indicate that most states and local governments would spend almost all of their Internally Generated Revenue (IGR) and FAAC allocations on salaries, and even borrow to pay their workers, who are less than one percent of their population.

Consequently, this could result in most state governments’ facing serious financial difficulty and unable to meet the needs of their citizens, especially meeting their obligations, govern effectively, and provide infrastructure, education, healthcare and security, among others.

Despite the increased FAAC allocations, particularly since the removal of petrol subsidy May 2023, some states are yet facing financial constraints, resulting in their inability to pay the current N30,000 Minimum Wage, which the Muhammadu Buhari administration agreed with the Organised Labour since 2019.

The report further stated that the three percent difference between the average revenue growth rate and average personnel cost growth rate in the economy means that any significant revenue shock or rise in personnel costs could pose financial challenges for most state governments in the country.

There would be challenges in any major wage increases, given the current revenue levels of states across Nigeria, which have necessitated careful consideration of fiscal constraints and their impact on future wage policies, the report stated.

It further said: “The real value of additional revenues has shrunken due to the surge in inflation, restricting the response options for states to the current socio-economic crisis and emphasising the delicate balance states must maintain.

“It is crucial to recognise state governments’ limitations in addressing today’s socio-economic situation.”

The report also noted: “While the state government can influence fiscal policy, it requires complementarity of fiscal and monetary policies at the Federal level to achieve the much-desired results.

“Any wage increase approach should align minimum wage adjustments with economic realities at the subnational level, prioritising the fiscal sustainability of states.”

Other non-monetary incentives government implements for workers, Nigerians

The Committee, in the report, equally listed some of the incentives so far provided by the Federal Government, which are intended to benefit, not only government workers, but the entire Nigerian people.

According to the report, these include the N35,000 wage award for all treasury-paid federal workers, N100 billion for the procurement of gas-fuelled (CNG) buses and conversion to gas kits, the N125 billion conditional grant, financial inclusion to Medium and Small Scale Enterprises (MSMEs), and the N25,000 each to be shared to 15 million households for three months.

The Tripartite Committee as well disclosed the release of 42,000 metric tonnes (MT) of grains from strategic reserves and the purchase and onward distribution of 60,000 metric tonnes of rice to the millers’ association, among others.

The report mentioned the N185 billion palliatives loans to states to cushion the effects of fuel subsidy removal and the N200billion to support the cultivation of hectares of land to boost food production, the N75billion to strengthen the manufacturing sector and the recently approved N1trillion for student loans for higher education in the country.

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