Last week, President Bola Tinubu announced a new minimum wage regime for Nigerian workers. This kind gesture, as seen and interpreted by the government through its body language, is coming weeks after back-and-forth movements between organised labour and the government, interspersed with strikes and threats of it, just to bring the government to the negotiation table after its undeniable unwillingness to do what it was supposed to do without duress. The crushing economic hardship that started at its slow speed during the last APC government of President Muhammadu Buahri had taken off to a rapid higher speed, with the current driver, President Tinubu, unable to apply brakes to stop its speedy movement, making it expedient for the government to have acted without compulsion from the organised labour.
The negotiations for the new minimum wage, which started with the high bargain of N600,000 from organised labour and the government’s laughable offer of N40,000, made it clear that both parties were insincere in their offerings right from the inception of negotiations. The insincerity came to a peak when the labour accepted N70,000 as a tradeoff against the offer of N250k from the federal government with a caveat to increase the price of fuel far above the current landing cost of N1,117, as fuel importers revealed just last week. So the government just confirmed the rumours to Nigerians without saying loudly that it is still paying for the fuel subsidy that was supposedly removed on May 29, 2023.
From the beginning, Labour knew its last and final proposition for a minimum wage of N250,000 was unrealistic, even as the government knows that its present offer of N70,000 is more unrealistic, given the prevailing rate of runaway inflation that has reduced the purchasing power of the average Nigerian. But Labour may have based its demands on the unbridled extravagance of operators of this government who live large at the expense of Nigerians, unconcerned and unperturbed, and without minding the poverty level of the people that they are governing.
From what happened in the past regarding a minimum wage, or is it a minimum salary for Nigerians, it is very certain that the issue is far from being settled, and the government duly acknowledged this by reducing the time frame for a review of the just-approved minimum wage from the normal five years to three years. The government anticipates, and correctly too, that the issue will come up sooner than later as the vagaries in the unplanned economy continue to inflict pains on the average Nigerian worker.
Before the expiration of the last Minimum Wage Act in April 2024, not all the states were able to pay the N30,000, and it had become a sore in the conscience of the nation, especially as the governors who were unable to pay the N30,000 lived lavishly, with many of them taking billions of naira as security votes without any reduction in insecurity, and some with as many as 40 state-of-the-art vehicles that cost millions of naira in their convoys just to inspect a road construction project that is less than 5 kilometres away from their offices, among other infamous spending of state funds without regard to the sufferings of the masses. With that mindset that has not changed even with the increase in revenue accruing to the states from the federation account that is shared every month, it beggars belief that the same set of governors will afford to pay the N70,000 without pressure from either organised labour or other external forces. In the end, the approved N70,000 minimum wage may just turn out to be words written on ordinary paper, with the person who approved it not being able to enforce the act that will bring it to life.
Considering that many states find it difficult to implement the national minimum wage, is it still realistic to have a national minimum wage, or will it be an invention to deviate from our local norm and allow states to peg their own minimum wage, which may be above or below the national minimum wage? While we ponder on this and evaluate its merits or otherwise, would it not be proper to question the use of the word minimum wage, as those for whom the whole drama revolves do not even receive wages but salaries? These are two different payment models, and in Nigeria, the people who ordinarily receive wages, which are calculated on an hourly basis, ordinarily belong to the private sector, and they are hardly factored in during discussions and negotiations about the minimum wage.
And who exactly constitutes the workforce that should benefit from the minimum wage? What is the volume of turnover or the number of employees a business should have for its workers to fall into the category of earners of the minimum wage? Is the Nigerian minimum wage exclusive to government workers and big unionised corporations alone? Are there measures to enforce compliance with small private sector operators? These are some of the undefined parameters that create distortions in the understanding and implementation of the minimum wage act in Nigeria and should be addressed in the interest of workers, businesses, and the government that sets the minimum wage.
The above points bring us to the challenge of documenting business entities in Nigeria, the lack of which has hampered the harmonisation of business activities and the collection of data, taxes, and analytics that are used for proper planning by concerned authorities. While it is understandable that growing the economy, just like any other sector, is a work in progress, efforts should be made to build a strong foundation that will capture, define, and close these lapses at the early stages of development and not allow them to become so humongous that addressing them in the future will become almost impossible.
As we await the passage of a new minimum wage act by the National Assembly, Nigerians expect that these grey areas concerning the applicability and implementation of a minimum wage for the workers are clearly defined so that those who have the responsibility to work and get paid and those who have the obligation to receive labour and pay are on the same page. And as we do that, the Ministry of Labour and other allied agencies should begin to tinker with the possibilities of transiting our work modules to hourly rates at the appropriate levels, so that the minimum wage, as the name aptly implies, can become more meaningful to the average Nigerian.
On its part, the federal government must be sincere in acknowledging that the current N70,000, which it approved as the new minimum wage, is truly not enough for the workers at that base level that receive such an amount of money. It must also be understood that the wage bills of many states will become over bloated when the new minimum is recalibrated to reflect the different levels of workforce in the states. The president had, during the announcement of the new minimum wage, promised to help the states pay the new minimum wage without explicitly saying how he intends to do that. Nigerians await further clarifications and action on that.
And as Nigerians wait for that, it is imperative that the President and his economic team go back to the drawing board and reevaluate and reassess their economic policies to see how they measure and conform to their objectives to revive the economy. The poverty in the land has become pervasive, endemic, and pathetic, even as social discontent has risen to its apogee, and there is an urgent need to cushion the effects of the hard times and declining economic opportunities for Nigerians, as well as improve their purchasing power, which has been eroded by the inflation caused by the shortage of food, insecurity in the land, and the high exchange rate of the national currency to the United States dollar.
The government’s media team has its work cut out for it, and this time, it must shelve public posturing and antagonism towards the opposition and inform Nigerians that the economic hardship they are currently facing is a product of the painful but temporary sacrifices they must make to redirect the economy in the right direction for future gains. But for Nigerians to believe them wholeheartedly, they must also see that the leaders are making the same painful sacrifices as the other Nigerians. Unfortunately, there is a total disconnect on that, as Nigerians do not see the leaders making any of these sacrifices. The leadership must sit up to earn its hallowed place; otherwise.
Amah, a Politician and seasoned commentator on current issues wrote from Abia
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