It will only be a matter of time before the bubbles begin to burst following last month’s declaration by governors that they can no longer pay the N18,000 minimum wage. This is really bad news for the lowliest paid and pauperised Nigerian workers. Consequently, the organised labour is warming up for a showdown. The governors who spoke under the aegis of the Nigerian Governors’ Forum attributed their incapacity to the country’s fast dwindling oil revenue due to the global crash in crude oil prices.
Before now, the minimum wage had run into troubled waters in not a few states. As of 2013, 18 out of the 36 states of the federation had yet to implement it, at a time oil prices still averaged $100 per barrel. The three tiers of government depend on rent from oil to survive, monthly, despite repeated warnings by experts that it is ruinous to do so. Now, the chickens have come home to roost.
Labour has promptly rejected the NGF’s claim, insisting that Nigerian workers are not responsible for the current cash squeeze, but irresponsible governance. The President of the Nigeria Labour Congress, Ayuba Wabba, warned that workers would not take any reduction in the minimum wage lightly. He said, “The problem is that they have not been able to reduce the cost of governance. They should reduce their security votes. Let them also cut down on the number of their entourage.”
For failing to do the needful, most states in the country, from late 2014, started to owe workers their salaries, resulting in arrears of up to 13 months. In July, the governors collectively cried out to President Muhammadu Buhari for a bailout; and, at his behest, N713 billion was released to 27 states to help in liquidating the debts. Ironically, some of the governors wrongly deployed the funds, thus aggravating the suffering of their workers, just as arrears are piling up.
Given the current inflationary trends, the value of N18,000 is puny; in fact, it is less than $100. A worker living on such a paltry income will find it pretty difficult to cope, let alone when it is reduced. Under normal circumstances, the minimum wage, having lasted for five years, is due for increment in line with international best practices.
It is deceitful of the governors to ascribe the parlous state of their states’ finances only to falling oil prices when they have failed to apply objective criteria and sound policies to the business of governance. Across the federation, unviable state airports litter the landscape. Imagine a state that depends mostly on rent to survive, having two universities, multiple colleges of education and polytechnics. These egoistic projects drained the resources of most of them, and paved the way for their insolvency.
Many states have yet to flush out “ghost workers and pensioners” from their system – a scam that creams off billions of naira monthly from their pay rolls – nor have the governors done away with their ostentatious lifestyle of buying private jets, chartering aircraft and engaging in other trite and wasteful ventures. The culture of wasting money on religious activities should stop. The inescapable truth is that government’s promotion of religious activities entangles politics with religion by seeking to confer spurious legitimacy on corrupt politicians.
The financial crisis will not go away immediately as the outlook of the crude oil market still remains unremittingly grim. State governments should immediately take advantage of the current low global energy prices and deepening economic difficulties to strengthen efforts to improve internally generated revenues. They need to diversify their financing sources, adopt realistic strategies for prudent management of resources and transparency in governance.
The present financial enigma facing them requires that some hard decisions be taken: reduction of the cost of governance, pruning the battalions of aides, ministries and agencies, and maintaining a manageable and productive workforce. The era of petrol-dollar is over. This is why each state should see the non-oil economy – agriculture and solid minerals – as an escape route. It is critical for them to target the provision of public services to the neediest people.
However, a few of the governors like Adams Oshiomhole of Edo State have distanced themselves from the decision of the NGF. His reminder to them that the minimum wage was a negotiated deal that they all accepted, and has nothing to do with the current economic gridlock, is a wise counsel they should adhere to.
