Consideration of the N27,000 minimum wage bill has already gained traction in the National Assembly as it passed the Second Reading in the House of Representatives on Thursday, a day after it was received. It had been forwarded by the Federal Government after sanctioning by the National Council of State, thus ending the long-drawn negotiations and consultations with the organised labour and other stakeholders. But the Nigeria Labour Congress has rejected the proposal on the grounds that it is not the N30,000, which the tripartite committee had agreed on.
Labour’s position elicited the House of Representatives’ sympathy as it insisted on N30,000. This means that the dust has yet to settle. However, the union leaders and lawmakers should be circumspect because of the present economic realities. Minimum wage in Nigeria transcends salaries of the least paid worker; it means graduated pay hike for all levels of workers.
It cannot be wished away that the most critical element in minimum wage review is the ability to pay. Fears about this by the 36 state governors, the most critical stakeholders in this matter, explain why they unduly hedged on it. They cited the difficulty most of them experienced in implementing the present N18,000 minimum wage. The backlog of salaries in 27 states for between six and 10 months has been an awkward part of governance since 2014, when the economy ran into a headwind, following the crash in global oil prices. Concerns about possible backlash from the forthcoming general election, bailout from the Federal Government and refund of the Paris Club over-deduction to states helped the governors to mitigate the absurdity.
But the reality is that the devaluation of the naira and inflation have indeed rendered the present minimum wage unrealistic. Influenced by these actualities, public pressure and the fact that national minimum wage review is a five-year constitutional imperative, the governors willy-nilly shifted their position to propose N22,500 as what they could offer, just as the private sector presented N25,000. Yet, labour stuck to its guns on N30,000, having bent over backwards from its initial proposal of N56,000.
The Federal Government has demonstrated good faith by offering to pay N30,000 as minimum wage to its workers. According to media reports, Kano, Nasarawa, Abia, Bayelsa, Cross River, and Jigawa are among states that have pledged to pay the N30,000 or a little higher, as states submitted memoranda to the tripartite committee.
If the parliament approves the N27,000 as national minimum benchmark and it coexists with multiple layers of higher minimum wages according to each state’s ability to pay, that would be triumphal for our federalism. Lagos, Kano, Anambra and Rivers states are economic heartbeats among their peers; the 13 per cent derivation, which Akwa Ibom State leads eight others in the Niger Delta region in collecting to enrich their treasuries and the differences in revenues distributed to states monthly by the Federal Account Allocation Committee demonstrate that not all the states have equal financial capacity. This cannot be ignored.
In the United States, California, the richest state, had $11 per hour minimum wage as of 2018. It was initiated in 2010 when it had $10.50 per hour wage, with an annual inbuilt incremental mechanism that will push it to $15 per hour by 2022. Still, the US minimum wage is $7.5 per hour. Imbibing this pragmatism in tackling wage increase, will reduce these unnecessary rancour and inflationary spiral lurking to erode whatever gains are inherent in the proposed new wage.
Undoubtedly, some less-resourced states will be hard put to implement whatever becomes the new wage order. Labour unrest looms. To manage the situation, states which have yet to take seriously their personnel audit should do so now in order to save cost from the ghost workers syndrome. The evil has rendered many states financially prostrate. Governments should not exist just to pay salaries to a tiny fraction of the populace, amid gross infrastructural deficits in good roads, healthcare delivery, schools, transportation, housing, and tackling the insecurity epidemic – all hindering overall development
Apart from ghost workers, many states have bloated workforce, a reckless contrivance of political expediency governors either indulge in or inherit, which should not be part of result-oriented governance. The malady should be tackled with a sense of urgency. Besides, governors should do away with hundreds of aides they do not need; right-size agencies with overlapping functions; drop the senseless use of caravan of vehicles in their travels and shun chartered flights. These measures will reduce cost.
The federal is as much challenged as the states, but it has done more than the latter in reducing the burden. For instance, data from the Accountant-General of the Federation’s office showed that the much vaunted police workforce of 371,800 is a farce. The Integrated Payroll and Personal Information System in February 2018 showed 291,685 personnel as their staff strength. This implied a N22.3 billion monthly wage bill as against N23.4 billion paid prior to the verification.
The then Minister of Finance, Ngozi Okonjo-Iweala, said in October 2014 that 60,000 ghost workers were weeded out, for which N160 billion was saved. Within the first year of President Muhammadu Buhari’s administration, additional 60,395 ghost workers were discovered through the Bank Verification Number device. It is an endless cleansing to protect the treasury from mindless looters. This explains why the Office of the Head of the Civil Service of the Federation, Winifred Oyo-Ita, began further verification of the federal payroll in July last year. It involves 300,000 workers in 486 Ministries, Departments and Agencies. This new phase of annual renewal of onslaught against payroll fraudsters spans 2017 to 2020.
Payroll scam is a huge industry in the civil service at all levels that will never stop without the adoption of crime and punishment strategy. The new fiscal burden requires imaginativeness in governance, states seeing themselves as economic units and developing accordingly, reduction of waste and injection of accountability in managing public treasuries. Only governors who imbibe these values will weather the inherent storm in the new wage saga.
