President Bola Ahmed Tinubu, on January 30, 2024, through Vice President Kashim Shettima, inaugurated a 37-member tripartite committee charged with the task of coming up with a new minimum wage for the country. The Committee, chaired by a former Head of the Civil Service of the Federation, Goni Aji, was also given a May 31st deadline for the submission of its report.
With membership cutting across federal and state governments, the private sector and organized labour, Shettima, during the Committee’s inauguration, urged its members to speedily arrive at a resolution and submit their report before the end of the deadline set by the President.
But with less than two weeks to the expiration of the deadline, this does not seem likely to happen.
The organized labour, led by the Nigeria Labour Congress (NLC) and the Trade Union Congress, (TUC) started the demonstration of craze (apologies to the late Fela Anikulapo Kuti) when its members in each of the six-geopolitical zones in the country started proposing various amounts ranging from N485,000 to N850,000 as what the least paid workers in the country should earn on a monthly basis. The TUC was a bit more realistic by fixing N447,000 as what should be the take home pay of the least paid workers. By the time the NLC ended its rigmarole, one month had been lost.
Another round of discussions started as the two labour unions felt that it would be more appropriate to present a single proposal to the committee. The NLC and the TUC came up with the figure N615,000, which was duly submitted to the Committee for consideration.
In arriving at the figure, labour leaders presented ‘facts’ using an average family of six comprising of the father, mother and four children as a template and the following criteria: •Housing/accommodation for a month – 40,000;
•Electricity bill – N20,000; •Utilities (water) – N10,000;
•Kerosene/Gas N35,000; and
•Food, at the rate of N9,000 for 30 days totalling N270,000.
Others include –
•Medical – N50,000; •Clothing – N20,000; •Education – N50,000;
•Sanitation – N10,000; and •Transportation – N110,000.
The NLC President, Joe Ajaero, said that their research was based on the current inflationary trend in the country and that a questionnaire was designed and sent to all the State Councils of NLC and TUC to enable them gather their data.
Ajaero, in his wisdom, noted that labour did not include other expenses such as the amount workers spend on mobile phone calls and data, offerings in Churches and Mosques, community dues, entertainment, savings, security, etc. He is of the view that the figure would have been higher had the recent increase in electricity tariffs been factored in. “Any figure below this amount becomes a starvation wage, which will condemn Nigerian workers and their families to perpetual poverty”, he stated.
But the Federal Government turned the whole negotiation into a joke when it proposed N48,000 as what workers should be paid as the minimum wage, while the Organised Private Sector proposed N54,000. As expected, the two labour unions were shocked by what they termed ‘ a ridiculous’ offer, which led to their representatives walking out of the Committee meeting.
According to the organised labour, what the government offered is a reduction in income for federal-level workers who are already receiving the old minimum wage of N30,000 as mandated by law, augmented by former President Muhammad Buhari’s 40 per cent peculiar allowance of N12,000 and the N35,000 wage award approved by Tinubu after the removal of fuel subsidy, totalling N77,000.
At a joint briefing in Labour House last week by Ajaero and the Deputy President of TUC, Dr. Tommy Okon, Labour lamented government’s failure to provide any substantiated data to support its offer, which exacerbated the situation.
The labour leaders argued that the government has shown total lack of transparency and good faith in their proposal, which undermines the credibility of the negotiation process and erodes trust between the parties involved.
Indeed, what can N48,00 get anybody in Nigeria of today? With N48,000, one can at least get 80 litres of fuel at N610 per litre. That is a full tank of some jeeps used by our leaders in Nigeria, and it won’t last more than two weeks. The Tinubu administration should be told if they don’t go to the market again that N48,000 will only get you half a bag of rice. If you are interested in gari, you may need to add some extra cash to get half bag of gari for the family. The proposed minimum wage of N48,000 will also get you 233 kilowatts of electricity if the worker is unlucky enough to reside in a Band A area meant for few lucky Nigerians who supposedly enjoy electricity for a minimal of 20 hours a day, and it is doubtful if it will last for a month. So, the right thing is what labour leaders did by outrightly rejecting the ridiculous amount offered by the government.
With the work of the Committee in the cooler and the NLC and the TUC not ready to return to the negotiating table to reach an amicable resolution of the impasse, it is now akin to the two parties playing Tom and Jerry with the lives of Nigerian workers.
Whilst the labour unions could be said to have come up with what is clearly above the capability of the Federal government and most especially the State government to pay, it doesn’t justify the ridiculously low amount of N48,000 which forced labour leaders to walk out of the negotiations.
In the interest of workers and the nation’s economy, both parties should be told in clear terms that they should come down from their high horses and give Nigerian workers a new minimum wage that would give a breather to an already traumatised labour force. The last year has been hell for most workers. Since the removal of subsidy on fuel and the unification of the dual exchange rate in the country, majority of public servants are now experiencing what has been tagged multi-dimensional poverty.
The present minimum wage of N30,000 has trapped workers in a cycle of poverty. As far back as 2021, 47.3 per cent of Nigerians were multidimensionally poor. That number has gone up significantly following the removal of fuel subsidy and a galloping inflation rate of 36 per cent, the highest in the last 28 years. The subsequent steep increase in the cost of living, without wage adjustments has pushed more Nigerians into the poverty quagmire.
The trajectory of minimum wages in Nigeria has shown a significant pattern. The first minimum wage in 1981 was N125 per month. At the exchange rate of US$1/ 0.61 naira in 1981, this amounted to about US$204. In 2024, that minimum wage would be equivalent to about 265,000 naira (US$204) per month, going by the current exchange rate of about US$1/1,500 naira. As of last week, the current exchange rate is US$/ N1,500.00. This puts the minimum wage in 1981, at least eight times higher than the current minimum wage. And this is due mainly to inflation and the poor value of the naira against other international currencies. The N48,000 being offered by the government if converted to US dollar is a meagre $32, far smaller than what many African countries pay their workers. In some of our neigbouring countries, the Naira is now being treated as trash, with traders now rejecting it.
As of last year, workers in the Seychelles, Libya, Morocco, Gabon, South Africa, Mauritius and Equatorial Guinea have $456, $325, $315, $256, $242, $240 and $224 respectively, as their minimum “take home” at the end of the month. Yet the giant of Africa is offering a miserly $32 to it’s workers.
In the United States of America, the minimum wage is $7.25 per hour, with states such as the District of Columbia fixing $17 per hour as its minimum wage. With most citizens working two or three shifts in a day, the majority are comfortable and doing fine.
In the United Kingdom, the minimum wage as of April this year is 11.44 pounds per hour, although many workers earn more than that. Needless to say, the standard of living in those places is far better than what is obtainable in Nigeria.
In the USA or UK, you have no choice but to sit and do the job for the specified number of hours you sign up for. Productivity is quite low here in Nigeria, and this has also led to the argument that workers should be paid based on what they put into the system.
The meagre salary of average workers in Nigeria would definitely increase corruption and graft within the system. There is no way civil servants would not demand gratification from anybody wishing to get one thing or another done within the system, as is already the norm. Top civil servants demand up to 30 percent cut from contractors, while the junior ones openly beg for money.
Again, the poor wage has resulted in low productivity, as most public servants saunter to work as late as 11am and are already on their way home or to their shops and other businesses once it is 2 p.m.
In an attempt to make ends meet, some families have now sacrificed education and deployed their children and wards into petty trading and menial jobs to make additional income for survival.
My opinion is that a minimum wage below N100,000 would be a starvation wage for Nigerian workers. The government should be able to pay such without much difficulty if they are ready to reduce corruption within the system and truly put the people first. Labour should also accept a reasonable figure, as insisting on an amount beyond the capability of state governments and the private sector would amount to shooting themselves in the foot.
That is when issues such as retrenchment and rationalisation of staff may come into the mix. Instead of asking for a wage increase alone, labour could also ask for free bus services, free and subsidised housing, and free medical care for workers and their families. If such facilities are put in place, it would go a long way in reducing the amount of money workers spend on such essential needs.
The federal government should also work on improving the security situation across the country so that farmers will be able to return to farming. This would lead to an increase in food yield and, ultimately, a reduction in the prices of foodstuffs.
All said and done, a new minimum wage that would at least take workers half-way home should be agreed on as soon as possible. All parties should also be sincere and put the interests of the workers and the nation first in their negotiations.
See you next week.
