Minimum wage: FG targets N62,000, govs want N57,000

Supreme Desk
8 Jun 2024 5:16 PM GMT
Minimum wage: FG targets N62,000, govs want N57,000
...if the N60,000 minimum wage was adopted, many states would allocate their entire allocations to salaries, leaving no resources for development projects.

The Federal Government may be on a collision path with governors and the business sector after agreeing to pay a minimum salary greater than N60,000.

According to Saturday PUNCH findings, while the Federal Government is willing to accept N65,000 as the new minimum wage, governors and the organised private sector are opposed to paying more than N60,000. They emphasised that any value exceeding N57,000 might not be sustainable.

According to insiders, the governors' main argument is that accepting a minimum salary above N57,000 would leave the states with little for developmental projects because they would have to pay a large portion of their resources to workers.

Negotiation not over

However, the negotiations for a new minimum wage are far from complete, with organised labour and the federal government continuing to make offers and counter-offers.

Organised Labour, which includes the Nigeria Labour Congress and the Trade Union Congress, has rejected the Federal Government's offer to pay N60,000 as a new minimum wage.

The Organised Labour Party also changed their attitude from N497,000 last week to N494,000.

A prominent member of the Tripartite Committee for the Negotiation of a New Minimum Wage for Nigerian Workers told The Punch that the Federal Government and organised private sector sides of the talks proposed an N60,000 monthly minimum wage on Tuesday, up from N57,000 last week when the committee met.

Last week, the government and OPS recommended N48,000 and N54,000, both of which were rejected by organised labour.


The organised labour had proposed N615,000 as the new minimum wage but found grounds to reduce their demand to N497,000 last week and then to N494,000 on Tuesday.

The committee's most recent meeting, however, ended in deadlock since no agreement was reached on what the new minimum wage should be.

The labour unions claimed that the current minimum wage of N30,000 could no longer meet the needs of the average Nigerian worker and that not all governors were paying the current wage award, which expired in April 2024, five years after former President Muhammadu Buhari signed the Minimum Wage Act of 2019.

FG’s proposal unsubstantial – Ajaero

NLC President Joe Ajaero slammed the government's new proposals as 'unsubstantial'. "It is still not substantial compared to what we need to get a family moving," the labour leader said of the country's current N30,000 wage for workers.

"The workers' economy has been completely decimated. In truth, the workers do not have an economy. I believe the country has two economies: the bourgeoisie's and the workers'. "I believe we need to coordinate this so that we can have a meeting point," Ajaero remarked.


Unions went on strike across the country on Monday because their demands had not been met.

Although the walkout was brief, it slowed economic activity in the country.

The strike, which began on Monday, was organised to protest the Federal Government's inability to adopt a new minimum wage by May 31, as well as its failure to reverse the increase in electricity rates.

According to The Punch, during a six-hour meeting with the leadership of organised labour in Abuja on Monday night, the Federal Government expressed President Bola Tinubu's intention to increase the N60,000 minimum salary.

The document read, "The President of Nigeria, Commander-in-Chief of the Armed Forces, is committed to establishing a national minimum wage higher than N60,000, and the Tripartite Committee will convene daily for the next week to finalise an agreeable national minimum wage."

Organised Labour additionally pledged to "immediately hold meetings of its organs to consider this new offer, and no worker would face victimisation as a consequence of participating in the industrial action."

These resolutions were signed on behalf of the Federal Government by Mohammed Idris, Minister of Information and National Orientation, and Nkeiruka Onyejeocha, Minister of State for Labour and Employment.

‘Why governors can’t pay N65,000 minimum wage’

Governors, on the other hand, accused the Federal Government of giving in to labour pressure without carefully considering the practicality of paying states more than N60,000.

While speaking with our correspondent under anonymity, a governor from the south complained how he would spend vast sums of money to pay less than 200,000 civil servants in the state, which accounted for less than 5% of the population.

According to Saturday PUNCH investigation, rage is higher among players in the Organised Private Sector.

“The FG has literally shaved our heads in our absence. Though we had nominal representations, they were not allowed to come back to us for proper consultation,” said a manufacturer in Lagos who craved anonymity.

Though governors, local governments and Organised Private Sector are against the N60,000, a member of the FG negotiation team said the Federal Government was ready to keep its promise of a figure higher than 60,000.

“Actually, FG’s position is that we can pay as much as N65,000, because the President believed in a quick and amicable solution,” the member told our correspondent on the condition of anonymity.

Also, documents seen by our correspondent with one of the governors who is a member of the negotiation team show the precarious financial status of the states and their inability to pay anything above the N57,000 they proposed alongside the private sector.

One of the documents which was released by the secretariat of the Nigeria Governor’s Forum and titled, ‘Comparative Analysis of States Gross Allocation Between Subsidy and Non-Subsidy Regimes (January – December 2023)’, showed the gross income received by states from the Federation Account.

A table in the document shows the States Gross Allocations, including revenues from Statutory Allocation, Value Added Tax, Electronic Money Transfer Levy, Exchange Gain, and Augmentations, as of when the subsidy regime was in place, and the non-subsidy regime in 2023.

Many states received more allocation in the second half of the year of the post-subsidy regime compared to when the subsidy regime was in place. This, according to the NGF, was due to an increase in the 13 per cent derivation in the first half of the year, and a reduction in the 13 per cent derivation in the second half of the year.

As seen on the table, Akwa Ibom, Bayelsa, Delta, and Rivers states, were the only states that received more allocation in the first half of the year when compared to the second half of the year of the non-subsidy regime.

Meanwhile, Abia’s gross allocation before subsidy removal (January to June 2023) was N38.7bn.

After subsidy, it increased by 20 per cent to N46.30bn. Adamawa received N38.380bn before subsidy, and increased by 22 per cent to N46.803bn.

Surprisingly, the gross allocation for Akwa Ibom reduced by 33 per cent to N125bn from N185bn (before subsidy removal).

Anambra’s allocation increased by 15 per cent to N53.603bn. Bauchi’s allocation also increased by N21 per cent to N53.937 bn.

States that saw a reduction were Delta (-26 per cent), Rivers (-12 per cent), Bayelsa (-20 per cent) and Akwa Ibom (-33 per cent).

The rest saw an increase by, at least, 20 per cent, except Edo (four per cent); Ondo (three per cent), and Anambra (15 per cent).

Another document sighted by our correspondent, titled, “Analysis of State FAAC Inflows and State Expenditures Profile” from the NGF secretariat showed that some states were not viable and may not be able to afford the minimum wage proposed by Organised Labour.

According to the table, Abia’s total revenue stood at N94bn. After paying salaries, the state will have a shortfall of over N17bn.

Ekiti, with a total allocation of N79bn, would have a shortfall of over N13bn after clearing a recurrent expenditure of N93bn.

Gombe would have a shortfall of N7.6bn after paying a recurrent expenditure of N82bn from a total revenue of N74bn.

Imo would have a shortfall of over N2.2bn after paying a recurrent expenditure of N97bn from its total revenue of N95bn.

Also, Katsina with a total revenue of N90bn would have a shortfall of N15bn after paying a recurrent expenditure of N106.26bn.

Oyo State would have a shortfall of N2.6bn after paying N152bn as recurrent expenditure from a total allocation of N149.4bn.

Other states with shortfalls include Plateau (N17.01bn); Sokoto (N3.440bn); Yobe (N18.720bn) and Zamfara (N27.369bn).

N60,000 unsustainable – NGF

Meanwhile, the Nigeria Governors’ Forum has issued a public disclaimer in reaction to the offer by the FG which they described as “unsustainable”.

The NGF in a statement by its acting Director of Media and Public Affairs, Halimah Ahmed, expressed concerns that if the N60,000 minimum wage was adopted, many states would allocate their entire allocations to salaries, leaving no resources for development projects.

The statement read in part “The Nigeria Governors’ Forum is in agreement that a new minimum wage is due. The forum also sympathises with labour unions in their push for higher wages.

“However, the forum urges all parties to consider the fact that the minimum wage negotiations also involve consequential adjustments across all cadres, including pensioners. The NGF cautions parties in this important discussion to look beyond just signing a document for the sake of it; any agreement to be signed should be sustainable and realistic.”

The NGF urged all parties involved in the negotiation process, particularly the labor unions, to take into account all socioeconomic factors, and reach a sustainable agreement.

Committee close to agreeing on new wage – Uzodinma

Meanwhile, the Governor of Imo State, Hope Uzodimma, said the Tripartite Committee on the minimum wage was close to agreeing on a new national minimum wage.

He disclosed this after emerging from the meeting of the committee on Friday which lasted for over 12 hours.

“We had a very fruitful deliberation and of course you know it is a technical subcommittee of a committee.

“And at the level of the committee, we have reached near consensus, and by the time we go to the plenary, we will have a complete agreement and maybe from there, the media can start their job. As it is now, I think we are better off than we were,” Uzodimma said.

He added that the committee had just finished with their various unit meetings and had now proceeded to the plenary where the committee was expected to harmonise their decisions and hopefully come up with a figure.

'Retract anti-workers statement’

Meanwhile, the NLC berated the Secretary to the Government of the Federation, George Akume, for terming Monday’s shut down of the national grid during the strike as “treasonable felony and economic sabotage.”

While rejecting the SGF’s insinuations, the NLC said that the former Benue State Governor’s utterances clearly exposed his personality.

In a statement by its Head, Information and Public Affairs, Benson Upah, the NLC argued that, “Those who loot our treasury around the country, those who divert public resources meant for hospitals and schools; those who are involved in foreign exchange round-tripping; padding of budgets and inflating contracts including those who steal trillions of Naira in the name of subsidy are the real economic saboteurs who commit treasonable felony.

Source: PUNCH

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