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.

According to findings by Saturday PUNCH, while the 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.

Negotiation not over

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.

A prominent member of the Tripartite Committee for the negotiation of a new minimum wage for Nigerian workers had told The PUNCH that the Federal Government and Organised Private Sector side of the talks proposed a N60,000 monthly minimum wage on Tuesday, as against the N57,000 they proposed last week when the committee last met.

The government and the OPS had initially proposed N48,000 and N54,000 last week, which were also rejected by Organised Labour.

Meetings

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.

FG’s proposal unsubstantial – Ajaero

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.

Strike

For failing to meet their demands, the unions embarked on a nationwide strike on Monday.

Although the strike was short-lived, it grounded economic activities in the country.

The strike, which commenced on Monday, was called to protest the failure of the Federal Government to approve a new minimum wage by May 31, as well as its failure to reverse the hike in electricity tariff.

It was  reported that after a six-hour meeting with the leadership of Organised Labour in Abuja on Monday night, the Federal Government expressed the commitment of President Bola Tinubu to raising the N60,000 offered as the minimum wage.

The agreement stated, “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 also agreed 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 Minister of Information and National Orientation, Mohammed Idris; and Minister of State for Labour and Employment, Nkeiruka Onyejeocha.

‘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 anger, according to  findings, is however more 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.