Last Monday, November 27, 2017, President Muhammadu Buhari inaugurated a 30-member tripartite National Minimum Wage Committee for the negotiation of a new National Minimum Wage for Nigerian workers. The inauguration held inside the Council Chamber of the Presidential Villa, Abuja, had in attendance governors and senior government officials. Some All Progressives Congress governors, Rochas Okorocha of Imo, Rauf Aregbesola of Osun, Atiku Bagudu of Kebbi and Simon Lalong of Plateau as well as the Peoples Democratic Party’s Nyesom Wike of Rivers and Ibrahim Dankwambo of Gombe, are members of the committee.
The President said the inauguration of the committee followed the recommendation of a technical committee put in place after the increase in the price of petrol in 2016. He also said the current minimum wage being used in the country had already expired. (It was supposed to be reviewed every five years). After the completion of the work of the committee, an executive bill would be sent to the National Assembly “to undergo scrutiny before being passed into law”.
By its tripartite nature, the committee is made up of persons from the public sector, (federal and state governments) and the private sector made up of the Nigerian Employers’ Consultative Association, Manufacturers Association of Nigeria, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture and Nigerian Association of Small and Medium Enterprises. The committee has a former Head of Service and Minister of Housing, Ama Pepple, as chairperson, while the Minister of Labour and Employment, Chris Ngige, will serve as deputy chairman. The Chairman, National Salaries, Income and Wages Commission, Richard Egbule, will serve as the secretary of the committee.
Other members of the committee are Udoma Udo-Udoma, Minister, Budget and National Planning; Kemi Adeosun, Minister of Finance; Winifred Oyo-Ita, Head of the Civil Service of the Federation; and Roy Ugo, the Permanent Secretary, General Services, Office of the Secretary to the Government of the Federation. The Director-General of Nigerian Governors’ Forum, Asishana Okauru, will serve as an observer. On the trade union side are the President, Nigeria Labour Congress, Ayuba Wabba, who leads a team comprising Peters Adeyemi, Kiri Mohammed, Amaechi Asugwuni and Peter Ozo-Eson. The Trade Union Congress is led by its President, Bobboi Kaigama, and other members including Sunday Salako and Alade Lawal. The President, Nigerian Union of Petroleum and Natural Gas Workers, Igwe Achese, is also a member. On the employers’ side are Olusegun Oshinowo, Director General, Nigeria Employers’ Consultative Association, as well as Timothy Olawale and Chuma Nwankwo. The Director General, Federation of Construction Industry, Olubunmi Adekoje; Chairman, Kaduna East Branch, Manufacturers’ Association of Nigeria, Ahmed Gobir; and Francis Oluwagbenro also from MAN are members.
It is important to understand how the issue of the national minimum wage came about. Nigeria joined the league of International Labour Organisation member countries that set minimum wage for their workers in 1981. The last time a minimum wage was set before the current one being reviewed was in 2000 with effect from May 1, 2001. Then, the wage was set at a paltry N5,500. It took 10 years to have this benchmark reviewed through a collective bargaining mechanism. The NLC said the union made a demand for wage increase in 2009 after a thorough study of the salaries of political office holders’ pre-and post-consolidation, as well as a careful examination of the minimum annual wage levels in African countries. The study showed that Nigerian workers were among the least remunerated in the world. In the NLC’s estimated cost of meeting basic needs for a representative family done in February 2009, a sum total of N58,500 was arrived at. The NLC however decided to demand a new national minimum wage of N52,200 which the union considered approximate least Minimum Annual Wage levels in African countries, the minimum cost of providing basic needs for the worker and their immediate family and the cost of living data.
In order to negotiate this request from the NLC and the TUC, the Federal Government set up a tripartite committee made up of representatives from the government, labour and the organised private sector. On the part of the government were four cabinet ministers, three state governors and a representative of the National Salaries, Incomes and Wages Commission. Labour drew its representatives from the NLC and the TUC, while representatives of the organised private sector include NECA and those of NACCIMA. The committee was chaired by former Chief Justice of Nigeria, Hon. Justice Alfa Belgore (retd.).
Information has it that this committee met for over one year, discussing and negotiating with different stakeholders. It was reliably gathered that all the 36 state governors as well as the NGF were formally written to make input into the negotiation. While some of the governors were said to have recommended a minimum wage of about N20,000 and above, the committee decided to propose N18,000 in order to make it easy for all concerned employers of labour to implement. It was also proposed that the new wage will apply only to organisations with a minimum of 50 workers in their employment. It was after this consensual agreement that the proposal was drafted into a bill and presented to the National Assembly for passage. This bill was passed and signed into law by former President Goodluck Jonathan on March 23, 2011.
That was the update from the last exercise. Now, Nigerian workers are demanding N56, 000 new minimum wage. Is that realisable given the current comatose economy where the extant N18, 000 minimum wage is not paid as and when due? The last exercise took about two years to conclude. How long will the current effort take before a new minimum wage comes into force? Is there a genuine intention on the part of the current administration to upwardly review the workers’ minimum wage? If yes, why did it take the Federal Government almost two years after the astronomic increment in the pump price of petrol as well at the expiration of the last minimum wage before the new review committee was inaugurated? Is wage increase the solution to workers’ plight in Nigeria?
There is no gainsaying that with the astronomic rise in the cost of living, Nigerian workers are right to demand wage increase. However, this may ultimately be counterproductive. If not carefully handled, it will lead to spiral inflation and low purchasing power. Even without increase in workers’ pay, the cost of food, housing, education and other essential services are increasing. This will worsen with a publicised wage increase. Furthermore, with about two-thirds of states and most of the local governments not being able to pay the current N18,000 minimum wage, what assurances are there that they will honour a new wage increase agreement? In July 2011, the governors gave two preconditions for them to pay the new wage increase. These are: Review of the current revenue allocation formula in favour of the states and the removal of subsidy on petrol. Only one out of these two conditions was met. Even at that, since 2015, they have collected bailouts and Paris Club refunds in excess of N2tn, yet many of them are still unable to pay the N18,000 minimum wage.
Can the Federal Government initiate moves to review the revenue allocation formula in favour of states to enable them pay the proposed new minimum wage? If the government at all levels will fix the infrastructural gap through the provision of low cost housing, good road network, quality and affordable education and health services, agrarian revolution that will bring down the cost of foods, improved and affordable electricity supply and other essential social amenities, these will help reduce the cost of living and improve the standard of living of Nigerians generally and workers in particular. Thus, irrespective of their small wage, the purchasing power will be high and they will be able to live decent lives. Will Buhari deliver on the new minimum wage before 2019? That is doubtful, very unlikely!
– Follow me on Twitter @jideojong