With inflation rate at an all-time high of 16.5 percent, and depreciating naira value, forcing costs of goods and services above the reach of millions of families, Nigerian workers could be sinking into deeper poverty as disposable income dips amid an economy in crisis.
This is as uncertainty seems to be surrounding the implementation of a new national minimum wage this year. Nigeria’s current national minimum wage is N18,000, an equivalent of $57 a month at the prevailing exchange rate of N315 per $1. This comes to $1.905 per day for an average worker.
The Minimum Wage Act was signed into law in 2011 by former President Goodluck Jonathan with a five-year lifespan. It had been due for a review in March 2016. Expectedly, organised labour has proposed a new minimum was of N56,000.
Although Peter Ozo-Eson, the general secretary of Nigeria Labour Congress (NLC), told BusinessDay on Tuesday that the NLC was expecting an invitation from the Federal Government to sit in a tripartite committee that would deliberate on the N56,000 proposal. But feelers from Abuja, however, indicate that the government is seriously considering whether its purse could accommodate a higher wage at this time.
According to a source, in the face of declining revenues to the federation account, government would prefer to keep people at work rather than raise wage and go borrowing to pay.
“We hear that the government has set up a tripartite committee to discuss the wage increase based on our N56,000 proposal. It is a tripartite committee involving labour, private sector and government. But we are yet to receive a letter to that effect,” Ozo-Eson said.
Femi Aborishade, a lawyer and founder of Centre for Labour Studies, Ibadan, however, dismissed the argument that the government could not pay a new minimum wage.
According to Aborishade, “the economy can afford to pay a higher wage. What we need to do is to separate needs from greed. Nigeria’s resources are sacrificed to service the greed of the political class.
“It must be stressed that it is only in paying higher wage that Nigeria can grow the economy by putting money in the hands of people. Increased spending at this time will surely have a positive multiplier effect across sectors of the economy. Again, it should be expected that wage should rise as inflation rises. Also, note that at the time labour proposed the N56,000 as minimum wage, the price of petrol was N87.50k, now a litre of petrol costs N145.
“The fight against corruption must reflect on the lives of the citizens. Nigerians are not only interested in recovery of looted funds but also in the funds being used to improve their welfare,” Aborishade said.
Simeso Amachree, acting general secretary of the Trade Union Congress (TUC), lamenting the hardship being faced by workers, said the labour was optimistic that the Federal Government would review the minimum wage.
Amachree said the existing N18,000 took three years of back and forth discussions to achieve in 2011, and labour expect the review would not drag for that long before an agreement was reached.
Meanwhile, with the rising inflationary trend squeezing disposable income, many families are cutting down certain essential needs and devising means of optimising their incomes.
For example, a source in the Lagos State Ministry of Education told BusinessDay that no fewer than 80,000 applications had been received from families seeking to withdraw their children and wards from private schools to seek admission in public schools. Public primary and secondary schools in Lagos are tuition-free.
It would be recalled that Lawal Babachir, secretary to the Government of the Federation (SGF) in May this year inaugurated a 16-member committee to look into three key issues, namely; minimum wage review, palliatives to cushion the effect of the increase in the pump price of petrol from N87.50k to N145, as well as appropriate pricing for petroleum products. The committee, which came in the wake of labour’s strike/protest against the petrol price hike, was to come up with three sub committees that would specifically deliberate and make recommendations on minimum wage, palliatives and appropriate pricing of petroleum products. As of yesterday, there was no confirmation that the sub committee on wage review had been constituted.
