Minimum Wage: Nigerian Governors Say Compelling States To Pay N62,000 May Lead to 40% Retrenchment of Workers

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As Nigeria’s federal government maintains it’s offer of N62,000 monthly minimum wage offer, state governors under the Nigeria Governors Forum (NGF) have doubled down on their rejection of the proposed minimum wage, maintaining that compelling them to pay the proposed minimum wage will have consequences.

A source, who disclosed to THISDAY the position of the governors at Friday’s meeting of the minimum wage committee, said the governors held that any forced wage bill on the states could lead to retrenchment of about 40 percent of workers in the states.

The source noted that most of the states were heavily indebted due to loans taken by their predecessors and could not afford the new minimum wage. He said only 10 states could afford the new minimum wage.

The 10 states that could afford the new minimum wage without affecting the overall strength and development of the states as Lagos, Delta, Akwa Ibom, Bayelsa, Cross River, Rivers, Ogun, Kano, and Kaduna.

The source said, “Kano State is listed in the states that can pay the new minimum wage because it does not have any huge debt burden. This is quite like some states across the federation.

“You see, over 24 drivers attending to only four or five vehicles in the fleet. What do you want such state governments to do? Sack them? But where the states are forced or coerced to pay, there could be consequences of up to 40 per cent retrenchment. States cannot be forced to pay the minimum wage because Nigeria is operating a federal system of government, which is based on the ability to pay.

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“In the United States, which we are emulating, take, for instance, the salaries of the governors of Vermont, New York and California are different with some rural states of Mississippi and others.  The governor of Vermont and his counterpart in California earn over $200,000 per year, but the governor of Mississippi earns less. This is operation of the federal constitution in place.”

The source further said revenue accruing to states only increased recently, as the daily crude oil production had remained poor.

It said the tripartite meeting challenged the president of Trade Union Congress (TUC), Mr. Festus Osifo, to explain from his experience since he came from the oil union what they had done to curtail oil theft and militancy in the South-south geopolitical zone.

It was further noted that the labour movement at the meeting threatened to picket Anambra State because the state was allegedly not paying the minimum wage. But the governor, Chukwuma Soludo, was said to have countered that the state had been paying.

The unions maintained that Anambra State was not paying the consequential adjustment as prescribed in the 2019 Minimum Wage Act, prompting Soludo to tell the gathering that in the 2019 minimum wage bill, there were no provisions for consequential adjustment payment.

The governors said at the Friday meeting that the N60,000 minimum wage was not sustainable and could not fly.

NGF’s Acting Director of Media and Public Affairs, Hajiya Halimah Ahmed, in a statement, said the forum urged all parties to consider the fact that the minimum wage negotiations also involved consequential adjustments across all cadres, including pensioners.

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NGF cautioned parties to look beyond just signing a document for the sake of it, insisting that any agreement to be signed should be sustainable and realistic.

It stated, “All things considered, the NGF holds that the N60,000 minimum wage proposal is not sustainable and cannot fly. It will simply mean that many states will spend all their allocations on just paying salaries with nothing left for development purposes.

“In fact, a few states will end up borrowing to pay workers every month. We do not think this will be in the collective interest of the country, including workers.

“We appeal that all parties involved, especially the labour unions, consider all the socioeconomic variables and settle for an agreement that is sustainable, durable, and fair to all other segments of the society who have legitimate claim to public resources.”

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