FG targets N62,000, State Gov. Insists on N57,000,

The Federal Government may be on a collision course with governors, and the private sector for agreeing to pay a minimum wage higher than N60,000.

Federal Government may be ready to accept N65,000 as the new minimum wage, governors and the organised private sector were against paying as high as N60,000. They insisted that any figure above N57,000 may not be sustainable.

The major argument by the governors, according to insiders, is that the states would be left with nothing for developmental projects if they accepted to pay a minimum wage above N57,000, as they would have to pay a large chunk of their resources as wages to workers.

However, the negotiation for a new minimum wage is far from over as Organised Labour and the Federal Government continue to make offers and counter-offers.

Organised Labour, comprising of the Nigeria Labour Congress and the Trade Union Congress, had again rejected the offer of the Federal Government to pay N60,000 as a new minimum wage for workers.

The Organised Labour also shifted ground from its N497,000 stance last week to N494,000.

Recall, The organised labour had presented N615,000 as the new minimum wage but saw reasons to drop their demand to N497,000 last week, and then to N494,000 on Tuesday.

The last meeting of the committee was, however, deadlocked as talks ended without an agreement on what to pay as the new minimum wage.

The labour unions said the current minimum wage of N30,000 could no longer cater to the well-being of an average Nigerian worker, lamenting that not all governors were paying the current wage award, which expired in April 2024, five years after the Minimum Wage Act of 2019 was signed by former President Muhammadu Buhari

NLC President, Joe Ajaero, described as ‘unsubstantial’, the fresh proposals by the government. “It is still not substantial compared to what we need to get a family moving,” the labour leader had said of the current N30,000 wage paid to workers in the country.

“The economy of the workers is totally destroyed. In fact, the workers don’t have any economy. I think there are two economies in the country— the economy of the bourgeoisie and the economy of the workers. I think we have to harmonise this so that we can have a meeting point,” Ajaero had said.

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

Governors, however, accused the Federal Government of caving under labour’s pressure without critically looking at the feasibility of paying above N60,000 for states.

A governor from the south, who is a member of the opposition, while speaking with our correspondent under anonymity, lamented how he would use huge amounts to pay less than 200,000 civil servants in the state, which did not constitute more than five per cent of the population.

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).

Culled from Punch