Tag: minimum wage

  • BREAKING: Governors agree to pay better wages

    BREAKING: Governors agree to pay better wages

    Arising from a closed-door meeting in Abuja on Wednesday, Governors on the platform of the Nigeria Governors’ Forum (NGF) have agreed to pay better wages.

    TheNewsGuru.com (TNG) reports the Governors held the closed-door meeting to discuss the proposed new national minimum wage, the issue of local government autonomy and other national issues.

    The NGF assured Nigerians, following the meeting, that better wages will result from ongoing negotiations between the government, private sector and organised labour.

    “The governors agreed to continue engaging with key stakeholders to reach a mutually agreeable solution. We remain dedicated to the process and assure that better wages will result from the ongoing negotiations,” a communique issued and signed by Chairman of the NGF and Kwara State Governor, AbdulRahman AbdulRasaq, reads in part.

    The Governors also deliberated on other issues affecting the country, including the ongoing Fiscal Policy and Tax Reforms.

    See the full communique below:

    ISSUED AT THE END OF THE 7th MEETING OF THE NIGERIA  GOVERNORS’ FORUM HELD ON WEDNESDAY, 26th JUNE, 2024

    We, members of the Nigeria Governors’ Forum (NGF), at our meeting held today, deliberated on issues affecting the country.

    1. Members received the Acting Country Director of the World Bank, Mr. Taimur Samad, and his team to discuss the Bank’s various programmes currently being implemented in the States, including HOPE – Series of Projects: Nigeria Human Capital Opportunities for Prosperity and Equality, Food and Nutrition Security, NFWP-SU: Nigeria For Women Project Scale Up, NG-CARES: Nigeria Community Action (for) Resilience and Economic Stimulus Program, SABER: State Action on Business Enabling Reforms Program, SPIN: Sustainable Power and Irrigation for Nigeria Project. Members expressed willingness to continue to provide the much-needed support to ensure programme effectiveness across the country.

    2. Members received a briefing from Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy & Tax Reforms Committee. He highlighted the progress made regarding the ongoing Fiscal Policy and Tax Reforms. He sought the input and support of their excellencies on a number of proposals which would directly impact the subnational level of government. Members pledged their support for the Committee to ensure the successful implementation of these reforms and to collaborate closely to address any challenges that may arise.

    3. The Forum received a presentation from the Honorable Minister of Women Affairs on the World Bank–Nigeria for Women Project Scale-Up, along with other activities of the Ministry. Members noted the importance of the project and emphasized the need to implement it at the State level as initially conceived, as the States are the primary obligors of the project. The governors acknowledge the work and contributions of the Ministry of Women Affairs in promoting gender equality, empowering women, and advancing social development across Nigeria.

    4. The Forum discussed the New National Minimum Wage. The Governors agreed to continue engaging with key stakeholders to reach a mutually agreeable solution. We remain dedicated to the process and assure that better wages will result from the ongoing negotiations.

    H.E. AbdulRahman AbdulRazaq

    Chairman, Nigeria Governors’ Forum &

    Governor of Kwara State

  • Tinubu to consult further on new minimum wage

    Tinubu to consult further on new minimum wage

    President Bola Tinubu will consult further before arriving at a final decision on the new national minimum wage for Nigerian workers.

    Mohammed Idris, Minister of Information and National Orientation, said this at the end of the Federal Executive Council (FEC) meeting in Abuja on Tuesday.

    He said the report of the tripartite committee on the new wage was presented and deliberated on at the FEC meeting, but was stepped down to enable the President consult further.

    Idris said this would allow the President take an informed decision on it before sending its bill to the National Assembly for consideration.

    “We discussed the new minimum wage issue at the council meeting.

    “The new national minimum wage is not just that of the federal government, it is an issue that involves the federal government, the state governments, local governments, and organised private sector.

    “And of course, the memo was stepped down to enable Mr President to consult further, especially with the state governors and organised private sector,” he said.

    The Minister of Finance and Coordinating Minister for the Economy, Mr Wale Edun, also briefed on government finances and debts, including ways and means.

    “When we interrogate the figures over the first quarter of this year, starting from middle of December 2023 and the end of March this year; if we want to be positive, what we will say is that the glass is half full.

    “We are halfway there. If not, we can be negative and try and say the glass is half empty. Why do I say this? The total debt stock of Nigerians in dollars terms fell by 15 per cent, that is very positive.

    “Any rating agency, any creditor, any investor looking at that will see it as a positive move.

    “We are a country that has petrodollar, we have ability to earn in dollars. So it’s highly relevant that we look at what is our exposure in dollars terms,” Edun said.

    According to him, on the other hand, the exchange rates increased by 8 trillion in actual debt issuance, and the total external debt and domestic debt in Naira terms had increased by 25 per cent.

    “That brings me to the foreign exchange movement which can change tomorrow, as we know. Linked to that is the all important question of the government’s capacity to pay its way.

    “Debt is all about the revenue to service it, and of course to use those funds properly, judiciously,  accountably and in a way that gives positive returns.

    “At no time have we gone to Mr President to seek permission to go the the Central Bank to pay anybody, be it external debt service, be it share capital cash calls for any of the liabilities that the government has,” he said.

    Edun explained that as with all agencies, the government was focused on ensuring that the revenue due to it was collected robustly using technology, avoiding blockages associated with manual processing, which he said had led to a very robust revenue effort.

    “Likewise, we are implementing debts or expenditure controls, also very ably empowered by technology.

    “Mr President inherited a legacy of N3.4 trillion in outstanding ways and means which have been securitised on the eve of the entry of President Tinubu’s administration.

    “We are doing a forensic audit, we are interrogating that figure because its a liability which we have to pray interest on. So, any deficit that you might see to the consolidated revenue account, may be automatic debit on a figure that is still being interrogated,” said Edun.

    Coordinating Minister of Health and Social Welfare, Prof. Muhammad Pate, also said the Council gave approval for the upgrade of key infrastructure in the country’s healthcare system.

    He said that the Council approved the engagement of a transaction adviser to develop a public private partnership (PPP) to expand, modernise and refurbish six teaching hospitals’ equipment.

    The hospitals are: University of Nigeria Teaching Hospital, Enugu, University of Uyo Teaching Hospital, University College Hospital Ibadan, National Hospital Abuja, Abubakar Tafawa Balewa University Teaching Hospital and Usmanu Dafodiyo University Teaching Hospital, Sokoto.

    “That is a massive upgrade of infrastructure. The transaction adviser will develop full business case and then come back to the Council for approval for mobilisation to execute the contract over the next 12 to 20 months.

    “The second item is the expansion of the pathology lab and the mortuary at the University College Hospital, Ibadan. The contract was awarded, and it also includes building hostels for nurses and other health professionals. That is under a PPP arrangement,” said Pate.

    He gave an update on diseases ravaging the country, particularly Cholera, which he said was discussed extensively, in addition to the emergence of yellow fever in Bayelsa.

    He said the National Centre for Disease Control was working with Lagos State, which has a very strong institutional ability to be able to contain the disease.

    The Attorney-General of the Federation (AGF) and Minister of Justice, Mr Lateef Fagbemi, said the Federal Government has approved procurement of Mikano CNG vehicles for the National Drug Law Enforcement Agency (NDLEA).

    He said that council also approved the procurement of two full body scanners for Lagos and Abuja International airports.

    Also, Minister of Works David Umahi gave an update on road projects across the country, assuring that by October, most of the ongoing road construction and rehabilitation would be completed.

  • NECA speaks on implications of minimum wage higher than N62,000

    NECA speaks on implications of minimum wage higher than N62,000

    The Nigeria Employers Consultative Association (NECA) says, any amount above N62,000 approved as minimum will create job losses.

    Mr Adewale-Smatt Oyerinde, Director-General of NECA said this, while speaking with journalists on Tuesday in .Abuja .

    He spoke on the sidelines of the third edition of the Nigeria’ Employers Summit with the theme, “Economic Renaissance: Harnessing Government Reforms and Private Sector Agility,”

    Oyerinde said that the organised private sector cannot afford above the N62, 000 as agreed during the tripartite committee negotiation meetings.

    According to him, any figure above N62,000, will create two different dynamics – setting the the tone for non-compliance and attendant litigations -.

    He stressed that setting a national minimum wage that will take away the ability to pay will set a stage for litigation and crisis.

    On the allegation of delay in the process, Oyerinde said that there was no delay as the process was ongoing, accordingly.

    “There is no waiting game and I think we have to put all this in context. It is misinformation,’ he said.

    He said after the tripartite committee’s recommendations to the President, a Bill is expected to be sent to the national assembly for legislation.

    He said what the labour can advocate for, is a fast-track of the process.

  • FG priced minimum wage like tomatoes before arriving at N62,000 – Labour

    FG priced minimum wage like tomatoes before arriving at N62,000 – Labour

    A member of the organized labour negotiation team in the Tripartite Committee for the New National Minimum Wage, Prince Adewale Adeyanju has criticized state governors for obstructing efforts to secure a reasonable wage for government employees

    Adeyanju who is also the president-general of the Maritime Workers Union of Nigeria (MWUN) described the negotiation on the new minimum wage as pricing of tomato and onions.

    He said: “If you are an employer of labour and you do not have a love of your workers in your heart, how do you call yourself an employer of labour? We have problems with OPS and the state governors who believe they cannot afford to pay N30,000 let alone the figure the labour is demanding.

    ”We started having that issue at the negotiating table where they were dragging from N30,000 to N48,000 and N60,000. They were priced as if they were tomatoes and onions before they now finally came out and said N62,000.

    ”Even before they arrived at N62, 000 the Organised Labour was still coming down so that we could be on the same page. Yes, the country is not smiling.

    “We all know what the harsh economic situation is and the workers have not been happy with the economic downturn. At the close of negotiations, we had two position papers; one from the government and OPS sides that recommended N62,000 and N250,000 from the Labour side which includes TUC and NLC.

    “The ball now lies on the table of Mr President who I believe that this is an opportunity to show empathy to the whole workers. This minimum wage comes every five years. Between now and five years, what is going to be the impact of the figure of a new minimum wage on the lives of the workers in their various workplaces?

    ”That is why we are appealing to him as a friend of workers who persistently promised to give workers a living wage to approve the N250,000. Nothing stops him from approving it, but we heard that he said he would only approve what is what the economy can afford.

    He added: “As organised labour, we all are citizens of this country and we know the economy can afford our demand. We plead that he should not listen to those greedy governors who want to pay slave wages to continue to maintain their outrageous and ostentatious lifestyle.

    ”The security vote they are getting is enough to pay that minimum wage. What are they doing with their security votes? Which security are they providing to the citizens? Some of the governors, the likes of Edo State, have been paying 70,000.”

  • Why governors flout minimum wage law – NLC

    Why governors flout minimum wage law – NLC

    Chris Onyeka, Assistant General-Secretary of the Nigeria Labour Congress (NLC) says many state Governors are flouting minimum wage Act because they do not believe in sanctity of the law.

    Onyeka gave the position in Abuja on Monday in an interview with NAN on minimum wage law and its implementation.

    While workers are anxiously awaiting a new minimum wage to be passed into law, 15 states are yet to implement the N30,000 wage enacted in 2019.

    Even, with the increased revenue accruable to states after the fuel subsidy removal, the attendant hardship brought about by the hike in pump price, the states are still recalcitrant in paying their workers the minimum wage.

    The states yet to implement the minimum wage, in defiant of the 2019 Act, are, Abia, Bayelsa, Delta, Enugu, Nasarawa, Adamawa, Gombe, Niger, Borno, Sokoto, Anambra, Imo, Benue, Taraba and Zamfara.

    Onyeka said: “A state Governor who does not believe in the sanctity of the laws will have a high proclivity to disobeying them.

    “If you examine the history of some of these governors and their handlers, you will find a preponderance of those who came to power by breaking the laws.

    “Is it now that they will obey the national minimum wage act?”.

    The labour leader said many governors were unwilling to pay civil servants their salaries because they see the state resources as theirs and are, therefore, not willing to share with the workers, who create the wealth.

    “Some Governors believe, erroneously, that workers’ salaries can wait or be toyed with without consequences, so, they do not place priority to it.

    “However, they forget that workers are human beings who need their salaries to meet their basic needs of life,” he said.

    Onyeka added that fiscal indiscipline in many states is legendary, adding that, the personal greed of some governors resulted in their appropriating state resources into their private pockets.

    The labour leader reiterated the need to cut cost of governance at all levels and end wastages..

    He identified the measures, to include, reduction in the number of political appointees to reduce overhead, as well as reduction in number of logistics, official and operational vehicles.

    Onyeka said the salaries and allowances of elected and appointed officials of the three arms of government should be in sync with what is receivable by civil servants.

    He said government at all levels should streamline procurement processes to ensure integrity and accountability, fiscal discipline and transparency

    “Governors should ensure budgetary fidelity, shun fund diversions and stop making provisions that allow for looting of the states.

    “They should stay more in their states, instead of constantly being in Abuja, spending a lot of money maintaining two state houses,” he said.

    Speaking on what could be done to compel the governors to obey the minimum wage law, the labour leader said the principles of law enforcement should be deployed.

    According to him, the national minimum wage Act has clauses that take care of the monitoring and compliance, noting that, the challenge is at the level of enforcement.

    “The Federal allocation to such states, once it is established that they are habitual breakers of the law, should be sequestered until they are compelled to pay.

    ‘The labour unions should also be empowered and supported in their actions against such states to pay.

    “The Judiciary should be strengthened, especially the National Industrial Court, to carry out its responsibilities effectively,

    “The court should not only give rulings, but also issue enforceable garnishee orders against such state governments,” he said

    Onyeka maintained that, it is the right of organised labour to embark on strikes, and the federal government must give protection to workers so aggrieved, to freely exercise their legal right.

  • NLC kicks against decentralisation of minimum wage negotiations

    NLC kicks against decentralisation of minimum wage negotiations

    Nigeria Labour Congress (NLC) has kicked against the call by some politicians for decentralised minimum wage negotiations.

    Secretary of NLC in Oyo State, Mr Adebayo Aribatise, in an interview with NAN on Sunday in Ibadan, said that decentralising minimum wage negotiations would put workers in some states at a disadvantage.

    Some politicians had, of recent, called for decentralised minimum wage negotiations.

    One of them, Dr Kayode Fayemi, stressed the need for allowing states to conduct wage negotiations with their labour unions, separate from that of the Federal Government.

    Fayemi, a former Governor of Ekiti, said that the position of Nigerian Governors’ Forum, of which he was once the chairman, was that states should be allowed to have negotiations with their labour unions, as ‘fingers are not equal’.

    Explaining the broader implications of a centralised minimum wage, the former governor noted that only a small percentage of the population benefits directly from minimum wage negotiations.

    However, Aribatise frowned at decentralising minimum wage negotiations, saying that it was not ideal for the country.

    He noted that some states in the country had not yet fully implemented the old N30,000 minimum wage despite the efforts put in place by NLC at the national and state levels.

    Besides, the labour leader said that some governors would abuse the privilege if they were allowed to negotiate minimum wage with their states’ workforce.

    “The fact remains that the law binds states to pay national minimum wage. It is expected that the federal government will continue to set the minimum wage. If not, some governors will continue to do as they like.

    “Some governors will bastardise the agreement if we allow it and junior workers will continue to earn nothing worthwhile,” he said.

  • Minimum wage, President Tinubu and the cow family – By Magnus Onyibe

    Minimum wage, President Tinubu and the cow family – By Magnus Onyibe

    I kindly request readers’ indulgence to share this captivating story, which I would like to use to demonstrate my support for President Bola Tinubu’s policy of eliminating fuel and naira subsidies—a measure that has been in place in our nation for roughly four decades.

    Hopefully, once we all understand and accept the principle behind ending the obnoxious subsidy regime, we will realize why we all must make the sacrifices that will lead to our country leapfrogging in the manner that Singapore moved from third to first-world status, as narrated by the late Lee Kuan Yew, a revered former Prime Minister of the island country, in his iconic book “From Third To First World”.

    Having set the stage, please allow me to offer an anonymously authored  anecdote that goes thus:

    A family resided on the outskirts of a tiny village. They possessed one cow and consumed its milk every day. If there wasn’t enough milk, they consumed less.If there was enough milk, they consumed it well. Consequently, that cow was critical to the mother, father, and children’s survival.

    One day, a lone traveller passed through the village. He was starving. The family generously shared their milk with the stranger, who was grateful and wished to repay the favor. When the traveler heard that there was a wise man in the area, he went to his house and told him about the cow-owning family who hosted and fed him when he was hungry. He requested advice on how to express his gratitude.

    The wise man urged him to kill the cow. The traveler was taken aback. However, because of the wise man’s reputation, he followed orders. A year later, the traveler went through the same community. This time, he observed a busy market store and a hotel.

    When he stepped into the hotel, the eldest son of the cow family was standing behind the front desk. “What happened?” inquired the traveler. “We lost our cow and had to go out and find a way to eat and so we opened a market and it grew and we opened this hotel and it is growing”. The wise man’s remarks returned to the traveler’s head.-“Kill the cow”.

    When the advice was offered, it seemed like a terrible thing to do. But, alas, it was the saving grace for the family, who had become ensconced in and gotten accustomed to their peasant lifestyle of living from hand to mouth, which they believed they were destined to lead.

    But things changed for the better for them when they got compelled to move out of their comfort zone after the cow was killed by their benefactor, who wanted to repay their kindness.

    The lesson in the preceding anecdote is that sometimes you have to let go of your security (comfort zone) and the things that keep you comfortable to progress in life.

    Obviously, the narrative above is highly relevant to our current situation in Nigeria. That is because we are so accustomed to receiving subsidies for petrol, naira, and  electricity power that we do not want to leave our comfort zone of being buffeted by subsidies derived from oil/gas sales. But now that crude oil sales is yielding less income and their production is dwindling, as a nation we ought to have woken up from slumber by saying to our leaders “ Kill the Cow” which is a euphemism for the removal of subsidy on consumption in our economy so that Nigerians can face reality like citizens of our neighboring countries that are not endowed with crude oil resources.

    Drawing a parallel, the subsidies on petrol, the naira, and electricity are analogous to the milk from the cow in the Family Cow fable.

    Presumably, the metaphorical picture is as clear as night and day for any Nigerian to grasp and understand without ambiguity the need to eliminate subsidies in our economy.

    By now it must also have dawned on some critics who have been arguing that President Tinubu should not have eliminated the subsidy without first consulting Nigerians, that the ‘traveler’ did not consult the cow family before slaughtering the cow which is the family heirloom. l can bet that they would have rejected the plan and continued to rely solely on cow milk for subsistence living until the cow died naturally.

    In light of the foregoing, contrary to the argument of the nay-sayers, removing the subsidy that was strangulating the country does not necessitate a conference with Nigerians to seek their approval, as former military president Ibrahim Babangida did during the 1984/85 IMF loan debate, after which Nigerians settled for the alternative–Structural Adjustment Programme (SAP).

    Please take note that the ‘wise man’ (IMF) had also recommended to then-head of state Gen. Ibrahim Babangida in 1984 to implement similar policies introduced by President Tinubu in 2023.

    Of course, one is not oblivious to the fact that Nigerians generally have disdain for the IMF which some deem to be an imperialist agent. But we would be throwing away the baby and the bathwater if we deem all IMF recommendations to be predatory and exploitative which we must reject. As a nation of intelligent citizens with a great world view, we can smartly navigate the global political and economic landscape to harness all the great benefits available as Dr Ngozi Okonjo-lweala (current WTO DG) did when she was finance minister during Olusegun Obasanjo’s presidency (1999-2007) by securing a huge debt write-off for our country.

    Now, some Nigerians who like to look at crucial national issues from the periphery and partisanship will scream against me and try to lynch me on social media for analyzing our country’s current unsavory circumstances of being at a crossroads via the lens of the Cow Family narrative above.

    But they don’t bother me at all because I’ve only contributed to nation-building through my grasp of the basic difficulties plaguing our country which are largely responsible for its underdevelopment and l have proferred solutions.

    George Bernard Shaw, an Irish polemicist and political activist, once stated:

    “Progress is impossible without change, and those who cannot change their minds cannot change anything.”

    As has been demonstrated by his very bold policy actions since taking over the reins of leadership a year ago, President Bola Ahmed Tinubu, who is an acknowledged progressive politician, is not frightened of change. As a result, he took what skeptics saw as a leap into the unknown by stating at his inauguration that the “subsidy is gone”.

    In light of the consequential high cost of living crisis exacerbated by the current minimum wage agitation by organized labor, President Tinubu is currently standing between the devil and the deep blue sea. That is simply because, as he has progressed in his governance over the last year, he has realized that governing Nigeria is a little more complicated than it appeared before taking over the reins of government. But in any case, he had declared on numerous occasions that he was not seeking sympathy because applied for the job and what he is only asking of Nigerians is the sacrifice of patience. Although Mr . President appears to be caught between the devil and the deep blue sea, a common term that Nigerians frequently use when they are in a quandary, he is determined to forge ahead no matter the difficulties being encountered.

    Practically, periods of decision or hesitation occur when the two best options available are both difficult and provide no reprieve or comfort. That is why President Tinubu is caught between approving the N62,000 recommendation of the team of negotiators he appointed to engage with organized labor for a new minimum wage and the N250,000 minimum demand of organized labor following the crippling strike action that was called on June 3rd,and got suspended after 48 hours.

    My hunch is that as President Tinubu heads to the office on Wednesday, he will be muttering under his breath the following words against organized labor activists, ‘ l think you picked the wrong time to demand an extraordinary rise in the minimum wage’.

    The assumption above is supported by the fact that organized labor is driving such an outrageous demand at a time when our economy is tanking, with the exchange rate rising to N1500/$1, petrol selling for around N600 per liter, food inflation exceeding 40%, and national debt exceeding N80 trillion, with roughly 98% of the national budget dedicated to servicing the monstrous debt.

    So, Mr. President is in such a precarious position that can be equated to sitting on a tinder box which is underscored by the fact that a new minimum wage negotiation driven by a 2019 minimum wage act that requires renegotiation every five (5) years has fallen due at such a critical time that the ongoing one-year-old socioeconomic reforms in Nigeria have disrupted and dislocated all the normal economic fundamentals in the country moving her from regular dynamics into uncharted territory.

    Because of the exceptional circumstances outlined above, it must be extremely difficult for him to establish which parameters to apply in determining the new minimum wage, which is required by law to be reviewed  – usually upwards, as inflation frequently rises and seldom falls in our country.

    Given the aforementioned conundrum, President Tinubu may be wondering whether it is best to base the new minimum salary on Purchasing Power Parity (PPP) or pegged to an inflation rate.

    It is a particularly dilemma for the president, possibly because it is as complex as untying the fabled Gordian knot, as neither choice has redeeming qualities.

    In a classic book on negotiation based on theory of principled negotiation which aims primarily for win- win agreements and nothing else, written by Roger Fisher and Willliam Ury titled “ Getting To Yes. Negotiating Agreement Without Giving In”, the authors talked about issues creation which is aimed at meeeting the interests of all the parties engaged in the negotiation.

    It is in that spirit that President Tinubu should aim to expand the pie on the table by factoring in other considerations into his offer to workers and indeed all Nigerians.

    So, following the conclusion of the Salah celebrations, on Tuesday, June 18, and the return to work on Wednesday, President Tinubu will have to decide whether to approve a 100% increase in the minimum wage, from N30,000 to N62,000, which organized labor views as a starting point.

    In comparison, the economy as it currently stands, the government, especially at sub-national levels would find it very difficult if not impossible to support the 100% increase plus another N2,000 that her negotiators have already committed to pay to halt the strike action.

    That being the case how would it shoulder the weight of the massive N250,000 that organized labor is requesting?

    It is striking that labor negotiators have been telling Nigerians that their goal is a minimum salary of N250,000, but astute observers can see that labor activists are just using the demand for a quarter of a million naira as a red herring and gimmick.

    The best course of action for President Tinubu,in my opinion would be to accept the N62,000 minimum wage agreement reached by government negotiators on his behalf and combine it with a further offer to reverse the hurriedly and poorly packaged increase in energy rates for so-called Band A customers.

    At best the increase should be graduated and the so-called Band A high tariff regime has to be well thought out as it is killing both large and small businesses.

    Take for instance my barber in Falomo, lkoyi Lagos. When l visited his shop a week ago,l was shocked to discover that by virtue of his location, he is in Band A region. So instead of turning on the airconditioner as he usually does when l am there for a haircut, (a routine that usually  enables me to connect  directly with the hoi poloi who l get to meet there) he turned on an electric fan to save cost. How does a small barber’s shop pay N225 per kilowatt of electricity? When l advised him to increase his price for haircuts, he made it clear to me that his clients could not afford to pay more. And I doubt, all things remaining the same, if that barber’s shop would still be open for business on my next visit in a month. If the young owner realizes that the shop has become unviable , he  would unsurprisingly join the ranks of the burgeoning unemployed youths in our country and a feedstock for outlaws seeking vulnerable youths to entice into their nefarious enterprise.

    Indeed, that electricity tariff upward review policy implemented earlier this year, in my opinion, needs to be revisited to drastically reduce it so that Nigerians can breathe, to borrow a phrase popularised by Senate President Godswill Akpabio, who used the term during a plenary session some time ago and drew criticism from Nigerians who saw it as contemptuous.

    In my assessment, the recent exit of some major manufacturing concerns from our shores may in part be traced to the drastic increase in electricity tariff. It may be the last straw that broke the camel’s back before their exit. So that makes it a candidate for re-calibration in the manner that the National Education Loan Fund,NELF was taken back to the lawmakers for amendment into a more functional document.

    Another reality is that the major key stakeholders directly involved in wage payment–federal, state, and local governments, as well as the organized private sector–had already spoken out boldly about their inability to bear the burden of a 100% increase in the minimum wage of N62,000 recommended by President Tinubu’s negotiating panel.

    Similarly noteworthy is the fact that organized labor may only speak or act on behalf of around 8% of Nigerian workers in the formal sector. That is because scientific studies have revealed that approximately 92% of Nigerians work in the informal sector.

    Remarkably, the above-mentioned category of workers may not be in sync with organized labor in their demand for N250,000, because the decision to raise the minimum has no direct effect on them. The assertion above is validated by the provisions in the 2019 minimum wage act which excludes them, particularly if they do not work in firms employing up to 25 people, which is the legal threshold.

    For clarity, the informal sector includes employees who work for medium and small businesses with staff strength of less than 25. It also includes domestic workers such as drivers, housekeepers, cleaners, babysitters, gardeners, and craftspeople who make a living daily. That category includes bus drivers and conductors, plumbers, mechanics, carpenters, vulcanizers, and barbers. Because the category of workers listed above are self-employed, any day the economy is shut down is a deficit for them.

    Given the forgoing circumstances, the questions I’ll pose next might appear insensitive. But we must call a spade a spade by asking how labor can demand half a million naira as a minimum wage when our country is currently resembling a ship caught in the high seas by very rough weather, with the usually robust and resilient vessel being tossed up and down by violent waves that can wreck the ship if the captain of the vessel is not a dexterous sailor. This is why President Tinubu must be very cautious and international about the decision he makes to resolve the minimum wage debacle.

    My evaluation of the nation’s current status, as described above, may appear embarrassing. But how else can one illustrate the difficult situation in a country where the value of its currency in terms of the foreign exchange rate has fluctuated like a yoyo, and general inflation is currently at an alarming 34%, with food inflation hovering around 40%, and which echoes what happened to Germany’s economy in 1923?

    According to historical records, after Germany defaulted in paying World War I (WWI) reparations to the countries involved in the devastating war that was imposed on it, many of them, particularly France, foreclosed on Germany by seizing their factories, causing massive disruptions in the country’s production activities. As a result, one U.S. dollar was equivalent to 1,000 billion German Marks between January to November of the same year.

    We will soon return to the unpleasant experience of hyperinflation in Germany by elaborating on the lessons that should be learned from that story as we confront the inflation demons that currently plague Nigeria due to the elimination of fuel, naira, and electricity subsidies and try to justify why Nigeria needs bold leaders and followers who are prepared to make the necessary sacrifices to pull our nation out of the current financial quagmire.

    Given the foregoing, we must critically examine the benefits and drawbacks of the three (3) quick reform initiatives that are to blame for the economy’s decline in the interim to be fair to everyone.

    As is already known, President Tinubu announced two (2) of the reforms on the day of his inauguration, which was on March 29, 2023.

    These are the elimination of the fuel pump prize subsidy and the partial floating of the naira, which was previously supported by the proceeds from the sales of crude oil.

    The third factor is the increase to N225  and into  band A electricity tariff that was implemented approximately six months into the current administration by the National Electricity Regulatory Commission (NERC), the industry regulator, and Mr. Adebayo Adebayo Adelabu, the minister of power.

    The current painful condition that has overtaken Nigeria is also caused by other issues, such as the high cost of governance and corruption, which are more entrenched since they have been plaguing our country since independence in 1960 and after the civil war in 1970.

    To save time, we will ignore the previously discussed issues in favor of concentrating on the current crisis, which has arisen as a result of the renegotiation of the minimum wage for workers in the formal sector, which includes only public servants and employees of private sector companies.

    Negotiating the minimum wage in our nation has frequently devolved into some form of hiatus, as we are all well aware. Therefore, it was greatly relieved when the Minimum Wage Act, a piece of legislation, was introduced in 2019 to rationalize  government administration and organize worker relations.

    To understand how organized labor and the government might work together to resolve the complex problem of the minimum wage, it is appropriate that we look at the issues raised by labor activists, which may be broadly divided into five (5) categories:

    (1) Those who committed the crimes of round-tripping and over-invoicing were not penalised when the petrol subsidy was eliminated. For instance,  corruption has no repercussions when smugglers and border guards stand by while tankers carrying millions of barrels of petrol enter adjacent nations illegally.

    Incidentally, the key perpetrators of the graft are civil servants or members of organized labor working government organizations such as Immigration, customs, and CBN officials who enable over-invoicing in collusion with NNPC agents.Also at fault are NPA officials who record and approve the transfer of cargo from the ships to the depot, but have not been prosecuted.

    Meanwhile many top government functionaries found to be corrupt , including nearly all former governors and numerous ministers, are presently serving jail sentences or are facing legal action from the EFCC? How many corrupt officials in the public sector and accomplices in the private sector are on trial or in jail like politicians?

    That is a question that organized labor must answer.

    The second factor (2) is the withdrawal of the naira’s subsidy, which caused the exchange rate to soar from N360.00 in 2019 to N1,900 before falling to N1,500, where it is at the moment.Rent seekers who had access to the corridors of power became instant billionaires, creaming off on the difference between official and parallel market rates, which could be as high as N300–400. They engage in arbitrage without consequences because currency speculators seem to be hand in glove with the authorities, thanks to multiple exchange windows, as former CBN governor Sanusi Lamido Sanusi alluded to.

    Again, the main actors in gaming the foreign exchange system are members of organized labor. What has the activists amongst them done to bring their corrupt colleagues to book?

    The third (3rd) thorn in the flesh of labour activists is its assessment that the increase in the cost of electricity tariffs, which manufacturers (those that have managed to stay afloat) are passing on to consumers by selling their products at market reflective prices, has quadrupled and is responsible for the rising cost of living.

    The situation is exacerbated by the CBN’s increase in the Monetary Price Rate, MPR which has resulted in banks charging frightening interest rates of up to 40%, creating a sort of prickly heat for entrepreneurs who are borrowing from banks at astronomical rates to run their businesses. They ask why the government is purposely hiking bank interest rates.

    The reality is that the CBN is raising interest rate to tame inflation which would otherwise have risen above its current alarming rate.

    The workers’ union cited the fourth (4th) friction point as the government’s seeming failure to respond to their request for a reduction in the cost of governance.

    According to organised labour and a critical mass of Nigerians, the government lives in wealth while the majority suffer from poverty.

    They cite the alleged spending of N21 billion naira on the vice president’s residence, N90 billion to subsidize  the 2024 hajj pilgrimage, and the legislative arm spending N160 million each to purchase Toyota Suburban Vehicles, SUVs for the 469 legislators, while ignoring assembled in Nigeria alternatives, at a critical time when Nigerians are suffering the worst misery since the civil war 54 years ago.

    The truth is that the decision for some of the actions that just materialized might have been made by the predecessors of the current administration which did not anticipate the current turmoil.

    The case that labor is making also involves what they call the unreasonableness of embarking on the $15 coastal route that runs from Lagos to Calabar.

    Without fear of contradiction roads are criitical infrastructure that are purveyors of development. Think of the Belt and Silk road initiative of China and the fact the UAE,a country of paltry population always builds mega infrastures such as the Jebel Ali sea port and the airport in Dubai which are world class. They simply expand their horizon which is what the coastal road to calabar from lagos and from Badagry to Sokoto would accomplish for Nigeria.

    The fifth (5th) complaint tabled by organised labor in their mix of their concerns is the rampant theft of our crude oil assets, which are our country’s primary source of foreign cash.

    It’s easy to forget that less than a decade and a half ago, our country produced 2.5 million barrels of crude oil every day. We are currently producing no more than 1.2 million barrels per day on average as a result of policy inconsistencies and theft.

    Hence our country is not earning enough income to sustain subsidy.

    The chairman of Total Energies, Mr Patrick Pouyanne, identified the problem in the Nigerian oil and gas industry when he said at a recent AfricaCEOs summit in Kigali, Rwanda, that Nigeria  lags in policy formulation. Evidently, the nearly three decades that it took to pass the much vaunted Petroleum Industry Bill (PIB) into an act of parliament, cost Nigeria $6 billion in investment in the sector because Total Energies had to invest the money in Angola while Nigeria was dilly-dallying.

    The widespread theft of crude oil, which occurs when pipelines burst or when crude oil is diverted through unmarked pipelines, resulting in yet another enormous loss of revenue for the country is being addressed by NNPC hired private security company Tantita to stop the theft but a lot is still being stolen.

    The Holy Bible says that a rich man would have a harder time entering God’s kingdom than it would be for a camel’s head to fit through the eyes of a needle. God might be surprised to see many wealthy men in heaven given that enormous ocean-going vessels are used to steal enormous amounts of crude oil and long articulated (trucks) are used to smuggle large volumes of petrol out of our shores and land borders on a daily basis without being caught.

    That thriving crime of moving cargoes of stolen crude in huge vessels by sea and large trucks by road can be equated to a carmel’s head passing through the eye of a needle and the crime is facilated by members of the organized labor as earlier stated.

    It would not surprise me if Nigerians would have corrupted the gatekeepers in heaven because those with criminal minds among us frequently brag about how well they were able to subvert the system by claiming that “with special arrangement, they can see God.”

    Given the above-described situation, corruption and insecurity—rather than subsidies in and of themselves—are our nation’s true scourge because they permeate the entire system and may even have become ingrained in popular culture as criminality has become a thriving industry in our beleagued nation. It is not necessary to pretend that everything is well in those regards in our nation and live in denial. This is the reason I wrote two (2) whole chapters  in my most recent book, LEADING FROM THE STREETS on the subjects. The first is  titled: Corruption And Unending Fight Against lt , the second one is Ethnic Nationalism, Separatism and Religious Insurgency. The truth is that Nigerians need safe environment to farm and engage in other productiive activities as opposed to being stranded in IDP camps which is currently the lot of those in the interior, particularly northern and middlle zones .

    Without exception both politicians and government personnel are corrupt, thus the problem in Nigeria is the leadership, as novelist Chinua Achebe of blessed memory wrote in his renowned book, The Trouble With Nigeria.

    When the Secretary to the Government of the Federation, SGF Senator George Akume castigated labor activist for switching off national electricity  grid during their strike action and accused them of having committed economic sabotage and treasonable felony, labor  leaders had pushed back by alleging that political leaders holding public offices are the real economic saboteurs.ln my piece last week after recalling by dredging up a catalogue of monumental acts of corruption perpetrated by civil/public servants who are part of organized labor, l concluded that their outburst was at best an act of righteous indignation, and it is a case of the pot calling the kettle black.

    The news currently making the rounds is that at 289 , Nigeria’s delegation is the highest at 2024 ILO conference in Geneva is unwieldy . In that regard is the organized labor not guilty  of the profligacy that it is accusing government of engaging in?

    The truth is that subsidies could have been managed responsibly because they are a tool for moderating or balancing an economy and society in order to mitigate spikes in costs. Even when we talk about free economies driven by market forces, the reality is that there is no such thing as an absolutely free economy devoid of interventions or modifications by government.

    Typical instances of subsidies are the Dole system in the United States of America, USA which pays unemployed people some money to tide them through until they find work. That is subsidy on consumption and the other type which is offer of student loans for people who want to go to college but can’t afford it, is subsidy on production.

    In my view, the response to organised labor’s questions Nos. 1, 2, and 3 regarding President Tinubu’s termination of the subsidy regime without devising a plan to ease the ensuing pains is that, had he announced the end of the subsidy until, say, six (6) months after taking office, the same forces that forced his predecessors to refrain from taking the risky action might have taken him hostage, and Nigeria would still be under the yoke of subsidy regime.

    Regarding the current government’s failure to punish corrupt people who committed crimes such as gaming the subsidy system, based on the experience garnered from the previous administration, which made anticorruption the focal point of its leadership, the reality is that focusing governance on anti-corruption may be popular, but it causes mass hysteria, resulting in even genuine investors fleeing  our country.

    That is largely why our country had a twin recession during President Muhamadu Buhari’s eight-year tenure. No responsible leader would be careless to fall into a similar trap.

    Regarding the CBN raising MPR,as earlier stated, government is attempting to contain inflation. If the MPR rates had not been raised, the inflation level may have doubled. Economists can agree or disagree about that strategy.In the instance of apparent wastage of funds by government, several of the initiatives that workers and Nigerians have derided are carryover decisions from previous governments. Take the vice president’s residence for instance . It certainly was not built in 12 months.

    Based on my own experience, when I first entered Delta State’s cabinet to serve as a commissioner over 20 years ago, government policies are like locomotive trains. Once they leave the station they do not stop travelling till they reach their predetermined destination. They are also similar to cultural and behavioural patterns that are difficult to break overnight.

    So, from the proposed purchase of a luxury yacht for the president, two new aircrats to add to the presidential aircraft fleet, a new residence for the vice president, humungous sum of money set aside for  funding for Muslim pilgrimage and the huge amount of money that 469 federal lawmakers spent on importing SUVs for themselves, which are given labor activists indigestion are actually obscene given the existential realities of hunger and starvation crushing a criitical mass of Nigerians, government appears to be insensitive to the plight of a critical mass of Nigerians being crushed by hunger.

    In fact some of these extravagances are what I would like to refer to as guilty pleasure. But as earlier stated,the majority of the policies predate the current administration in terms of when they were initiated and the challenges were also not anticipated at the time they were proposed.

    That is why I have been making the case that Nigerians should give the Tinubu administration, which is now in its infancy (just a year old), enough time to for her policies to unfurl, blossom  and mature. It  is the crux of the argument I made in my column a couple of weeks ago when I evaluated the government after one year of a four-year tenure, which is 25% of 100%.

    Fortunately or unfortunately, the administration is presently developing its budget for next year, for which President Tinubu will be taking full responsibility, and it is what Nigerians will be using to fully and properly review the administration after 24 months which would be halfway through the 48-month period. If the identified profligacy in the 2024 budget re-occurs in the incumbent’s 2025 budget, Nigerians will be justified in condemning him.

    The story of the Cow Family does not end there.

    It is important to note that it is a period of high inflation in Germany that resulted  in a revolt that threw up Adolp Hitler of the holocaust fame as leader of Germany. We all are well are of his tyranical rule and the legacy that he left for mankind.

    So,we should be careful of what we wish for ourselves.

    Bringing it back home here in Nigeria we may recall after military president Ibrahim Babangida put up the lMF loan proposal to a public debate and Nigerians opted for the alternative -SAP which he commenced its implementation ,he derailed  due to pressure from impatient Nigerians. Gen. Babangida buckled and stepped aside . The pressure is similar to the type currently being pilled on President Tinubu by some perhaps skeptical and clearly partisan Nigerians to scrap the policies that have moved them away from their comfort zone.

    We all have full knowledge of who took over the reins of governance from Gen. Babangida and ruled in a manner reminiscent of Adolf Hitler of Germany and brought similar infamy to Nigeria- late Gen. Sani Abacha.

    Again,my counsel is that Nigerians should becareful what they wish for , always lean on history to appreciate what it teaches and imbibe the culture of patience because governance is not a sprint, but marathon.

    That is my humble counsel which l hope l have been able to illustrate very well with the Cow Family anecdote.

     

    Magnus Onyibe,an entrepreneur,public policy analyst, author,democracy advocate,development strategist,alumnus of Fletcher School of Law and Diplomacy at Tufts University, Massachusetts, USA, and a former commissioner in the Delta State government, sent this piece from Lagos, Nigeria.

    To continue with this conversation and more, please visit www.magnum.ng.l

  • Labour told to accept N62,000 minimum wage offer

    Labour told to accept N62,000 minimum wage offer

    A former Permanent Secretary in Osun, Alhaji Fatai Kolawole, has urged civil servants in Nigeria to accept the N62,000 new minimum wage offered by the Federal Government.

    Kolawole, who retired as Permanent Secretary in the State Universal Basic Education Board (SUBEB), stated this in an interview with newsmen on Wednesday in Modakeke, Ife East Local Government Area of Osun.

    He attributed his position on the new minimum wage for Nigerian workers on the present economic downturn which, he said, was global.

    Kolawole, however, described the economic challenges as a passing phase, calling on Nigerians, particularly the civil servants, to exercise patience with President Bola Tinubu on the country’s economic condition.

    He said that the civil servants should consider the N62,000 minimum wage offered by the government for now, as thing would be getting better gradually.

    The retired permanent secretary expressed the hope that prices of petroleum products would soon come down, particularly with the ongoing turn-around maintenance of the Port Harcourt Refinery and the coming on stream of Dangote Refinery.

    “Dangote Refinery has reduced diesel price from N1,600 to N1,200 per litre and has said that by July, petrol will come down to between N400 and N400 per litre.

    “We should note that the economic downturn is global, as those in foreign countries are also not having it easy.

    “So what is happening is not in Nigeria alone. It should, however, be seen as a passing phase,” he said.

    Kolawole noted that the federal government was re-jigging the system during which things might be a bit hard.

    “This is a bitter pill that Nigeria must take now and hopefully, within the next one year, things will change for better. Surely, there’s light at the end of the tunnel,” he said.

    The retired technocrat expressed confidence in the handlers of the nation’s economy, whom he described as capable hands, assuring that the things would soon turn around for better.

  • Minimum wage review: My take away – By Babatunde Fashola

    Minimum wage review: My take away – By Babatunde Fashola

    By Babatunde Fashola

    During my participation at the Covenant Nation’s The Platform event, on June 12, 2024 I promised to provide a reasoned contribution to the conversation on minimum wage.

    Here it is. 

    The extant law on minimum wage is the National Minimum Wage Act 2019, which came into force on the 18th April 2019; and it provides in Section 3 (4) that: 

    “The national minimum wage expires after five years, and it shall be reviewed in line with the provision of this Act.”  

    Please note that it is the “minimum wage” that has expired but not the Act, and as is shown in the underlined portion above, the review of the 2019 minimum wage provisions, after the period of five years, shall be in line with the provision of the 2019 Act.

    What is the minimum wage? 

    The answer is to be found in Section 3 (1) of the law where it provides that:

    “Every employer shall pay a national minimum wage of not less than N30,000 per month to every worker under his establishment, except as otherwise provided under this Act.”

    Please note the words used in the underlined portion of the provision, namely; “wage” and “per month”.

    Bearing in mind that this is a federal law, there must be constitutional authority for the Federal Government through the National Assembly (NASS) to make laws on wages. 

    This authority is to be found in item 34 of the 1999 Constitution as amended in the Exclusive Legislative list which confers power on the NASS to legislate on:

    “Labour, including trade unions, industrial relations, conditions, safety, and welfare of labour; industrial disputes, prescribing a national minimum wage for the federation or any part thereof; and industrial arbitrations.”

    On the face of it, all will seem to be normal until we examine closely what a wage is. 

    In my recent monograph, “The Nigerian Public Discourse: The Interplay of Empirical Evidence and Hyperbole”, I had made the point at page 89 that: “…the word…used in item 34 of the Exclusive Legislative list is minimum wage.” 

    It does not talk about salaries. I further stated that “…it has also been shown, wages and salaries are different and should not be conflated.” I posited that “…efforts to improve minimum wage must be that and nothing more. It must not translate to a salary overhaul by accident”. 

    What then is the difference between “wages” and “salaries” and what has NASS legislated? 

    All the definitions available recognize that wages and salaries are common methods of compensation open to the employer.

    However, a salary is a fixed annual amount, payable at specific intervals subject to agreement. It can be paid weekly, bi-weekly or monthly. 

    On the contrary, wages refer to payment based on an hourly rate and the number of hours the employee works. 

    Therefore, it seems obvious from this definition that by making a law in Section 3(1) of the Minimum Wage Act that the minimum wage of N30,000 shall be paid monthly, the NASS may have acted unconstitutionally by legislating on a SALARY (monthly payment) when they only have power to legislate on WAGES, an hourly payment.This is important while the conversation on minimum wage is being had in 2024 because in Section 3(4), the minimum wage “shall be reviewed in line with the provisions of this Act” which includes Section 3(1) that has prescribed a monthly amount instead of an hourly wage. 

    If we follow the proper definition of wages as an hourly rate and apply the global method for computing it, which is to divide the gross annual sum by 52 weeks, and further by 40 hours recommended per week, we will have for Nigeria a minimum wage that is not N30,000 per month, but rather N30,000 X 12 (months) = N36,000 divided by 52 (weeks) = N6,923.07 divided by 40 (hours), which will give a minimum wage of N173.07 per hour

    In other jurisdictions where the minimum wage is applicable, amendments to increase them do not necessarily translate to massive distortions across the salary compensation scheme.

    Those who are bound to pay minimum wage can also adjust their ability to pay by limiting the hours that employees work and maximise productivity, while employees cover the gap by working the additional hours in other places.

    What we have done is to erroneously fix monthly minimum salaries as wages, and then effect consequential adjustment for all other SALARY EARNERS, which results in a bloated compensation wage that employees find difficult to meet. 

    It would seem that since the employer has a choice to compensate the employee by either salary or wages, it must be presumed all institutions whether of Government or the private sector that have opted to compensate by salary payment are not bound by the minimum wage Act provisions if they do not pay hourly rates.

    This perhaps explains in part, why some employees observe the law in breach than in compliance.

    The exemption provided in Section 4(1)(b) of the Act for “an establishment employing less than 25 persons” from being bound by the provisions of the Act to pay the minimum wage also raises serious doubts about whether we have enacted a minimum wage Act if small businesses who barely have 25 employees but who employ the largest number of the most vulnerable people are exempted from the law as currently legislated. Who then is the law protecting? 

    Of course, if and when we decide as a country on the implementation of a proper minimum wage, we must then design a formula to review salaries of those who do not earn wages in order to assist them deal with cost-of-living challenges. 

    This may yet be the most fruitful outcome of the dilemma of appropriate employee compensation as it may lay the foundation for national productivity, wealth creation and prosperity. The opportunity is too big to miss or waste.

    When cost of living rises as they have now, the lowest and the highest income earners are impacted to varying degrees and therefore deserving of reasonable adjustments whether they earn wages or salaries.

    This is the time for the experts in labour law and compensation matters to put their thinking caps on and to seek help from the best faculties around the world.

    As we do this, we must be mindful of the need for a POSSIBLE amendment to item 34 of the Exclusive list in the constitution to include SALARIES because it currently does not.

    Babatunde Raji Fashola, SAN, CON.