… As experts blame non-implementation on corruption
From Isaac Anumihe, Abuja
As the Nigeria Labour Congress (NLC) and Nigerian workers anxiously await another wage increase next year, many private organisations and agencies of government, including 15 state governments, have yet to implement the old wage of N30,000. The states yet to implement the minimum wage include Abia, Bayelsa, Delta, Enugu, Nasarawa, Adamawa, Gombe, Niger, Borno, Sokoto, Anambra, Imo, Benue, Taraba and Zamfara. Also, over 70 per cent of workers in the private sector and some ministries, departments and agencies of government (MDAs) have yet to receive the N30,000 minimum wage.
The Labour Act of 2004 set the standard for the minimum amount of naira a worker in Nigeria is supposed to make. In 2004, the minimum wage was ₦5,500.00 per month. In 2011, the National Minimum Wage Act of 2011 set the minimum wage to ₦18,000.00 per month. And in 2019, the current minimum wage of N30,000.00 per month became effective.
In line with the Labour Act, minimum wage is adjusted every five years. The last adjustment was in 2019. So, workers are eagerly awaiting a new minimum wage next year. It’s in recognition of the fact that some states and MDAs have yet to implement the new wage that necessitated an action plan by the National Salaries Incomes and Wages Commission (NSIWC) to set up monitoring teams across the country to know the extent to which the project has been applied.
The exercise, which begins nationwide from Monday, January 23, 2023, is aimed at ascertaining the ability of the agencies to pay and the compliance of the public and private employers/organisations that are liable or have violated the provisions of the 2019 Minimum Wage Act.
It’s also to ascertain the payment of the monthly minimum wage of N30,000, and to ensure that employers keep adequate records of wage/conditions of service of employees.
Also, the programme will enlighten the public and private employers/organisations on the economic benefits in adhering to the payment of the National Minimum Wage.
It will also help in obtaining baseline data on remuneration policies and practices of private sector organisations in order to enrich the commission’s data bank on staff compensation.
Besides, it will enable the commission obtain information that will aid the process of the next year’s review of the National Minimum Wage.
The monitoring team is drawn from key stakeholders, including Federal Ministry of Labour and Employment, Federal Ministry of Finance Budget and National Planning, Head of Service of the Federation, Office of the Accountant-General of the Federation, Budget Office of the Federation and National Bureau of Statistics.
Given the gross violation of the N30,000 minimum wage, it’s certain that the 2024 minimum wage will equally be disregarded by the states and government agencies in view of the low revenue of states, high inflation, high exchange rate, cost of transportation, cost of living and total economic strangulation.
According to International Labour Organisation (ILO) Convention 13, minimum wage should be adjusted from time to time.
It further clarifies that minimum wage rates should be adjusted to take into account changes in the cost of living and other economic conditions. In principle, this revision can take place either at regular intervals or whenever such a review is considered appropriate in the light of the variations in the cost-of-living index.
Governments and social partners can in principle agree to revise the minimum wage whenever they consider it necessary. However, in the absence of fixed periodicity, both workers and employers will be affected by some uncertainty.
Workers who receive a minimum wage do not know for how long price inflation will erode their purchasing power, while employers do not know when they might suddenly face an abrupt increase in their labour costs. Indeed, it has been observed that in countries without fixed periodicity, minimum wages sometimes remain unadjusted for long periods followed by sudden and large adjustments. This not only weakens the relevance of the minimum wage, it also makes it more challenging for enterprises to absorb the cost increases.
Most frequently, countries adjust their minimum wages once a year. Some countries adjust rates every six months, while others have two-year intervals. Annual adjustments seem adequate in periods of low or moderate inflation, providing workers and employers with appropriate predictability and allowing for regular adjustments, in line with evolving economic circumstances.
Meanwhile, yearly adjustments allow for predictability and smooth adjustments, and can be complemented by more frequent adjustments when inflation exceeds some threshold.
In some countries, when inflation accelerates above a certain threshold, more frequent adjustments are automatically applied. In France, for example, the minimum wage is automatically increased whenever price inflation exceeds two per cent within a given year.
But in Nigeria, in line with the Labour Act, minimum wage is adjusted every five years. The last adjustment was in 2019.
Speaking with Saturday Sun, a public affairs analyst and an economy expert, Dr Austin Maho submitted that the Federal Government, state governments and even the private sector can pay any wage if wastages are minimised.
“Let’s start from the government. We have consistently said that there are too much wastages in government. Government cannot waste its resources and at the end of the day you now say that you don’t have money to implement what concerns the ordinary man in the street. When we talk of minimum wage we are talking about the ordinary man in the street – the poor and at times the poorest of the poor. There is no country in the world that doesn’t have a basic minimum wage. And when the private sector fails to implement the minimum wage they are only taking a cue from the federal government, which is violating its own rules, its own law. So, we cannot hold them to account because the government, which is supposed to show example, has failed to do so. To answer your question, before the minimum wage was agreed upon, the government has taken into consideration all its resources and equally considered its ability to pay both at the federal and state levels. In any case, it has become a law that Nigeria’s minimum wage is N30,000. Whereby the federal government is violating its own law, it means that we are not serious as a country. It means government is not sincere to its own people and its own workers.
“I feel that for them to be able to implement the minimum wage, government should have cut down the so many wastages we have in government. If you look at the federal level for instance, there are so many wastages. There are so many areas money goes into that even if the government tells you there’s no money it doesn’t make sense.
“We have heard cases of corruption whereby a certain individual confessed to have corruptly enriched himself to the tune of N20 billion. So, a government that has such funds for one individual to have access to cannot come around to say that it doesn’t have money to pay N30,000 minimum wage. Or at the state level where some of the state governments misappropriate the security votes which runs into billions of naira. If they have money for all these other activities, the one that concerns you and I (the workers, the masses, the poor man on the street) should not be the one that should suffer. They should be able to generate that fund within what is already coming into government coffers to be able to take care of the minimum wage.
“In the last five years, even the minimum wage of N30,000 has become nothing. Five years ago, you could buy a bag of rice for between N8,000 and N10,000. But today, that N30,000 cannot even buy one single bag of rice. We know that as at five years ago, we could use between N145 and N135 to buy a litre of fuel. Today, you and 1 know that a litre of fuel has risen up to N450. We know that the exchange rate as at five years ago was between N250 and N300 per dollar. Today, we know that It’s about N750. So, even the N30,000 minimum wage you are talking about, when you convert it, it’s just about 60 dollars.
“So, how do you want to check corruption in the system when you know that the average take-home pay cannot even take him to and back home in one week not to talk of one month whereas he has not taken care of other means to keep him going. So, if Nigeria is serious about fighting corruption, for instance, the average worker should be able to earn a wage that should be able to meet his basic needs. So, we don’t have to pretend about it. When we talk about corruption, we are operating a system that encourages corruption. You don’t tell a civil servant to eschew the act of corruption when you and I know that whatever you are paying cannot take him home,” he narrated.
Similarly, a world-acclaimed Professor of Statistics, Olusanya Olubusoye, opined that Nigerians should concern themselves with maximum wage and not minimum wage. This is because the minimum wage belongs to the poorest of the poor while the maximum wage is for the bourgeoisie, the political class and the supper-rich Nigerians.
His words: “There’s a huge difference between the two. We are always bothered about minimum wage, which is for those at the lowest echelon. Those at the top have freedom to increase their own even without our knowledge. So, they are immune to what’s happening around them. They are protected. They can easily change their wage without notifying us.
“Maximum wage is not meant for the private sector but it’s meant for the public sector. Actually, the minimum wage should be for the private sector so that the companies will not begin to manipulate or use the workers without giving them adequate compensation. They can regulate the private sector’s wage, using the Minimum Wage Act. They should also regulate the public sector using the maximum wage act.
“The truth is that in other economies, we don’t have fixed wage. Your wage is attached to the purchasing power. If the inflation has gone up, your wage is adjusted automatically to sustain your purchasing power. Just within this year, prices have changed astronomically. So, the labour unions and the governments are putting the workers in perpetual penury. And if we continue like that, I don’t see the end to the vicious cycle.
“If you peg the maximum wage – what the president is earning, what the senators are earning, what all the top public officers are earning – the highest you can have is N500,000. Let it be that the interval between the maximum and the minimum is too wide. The focus has been on the poor people while the rich people have their way and enjoy themselves. They can change their wages at will.”
In his own contribution, an Economy lecturer at the Afe Babalola University, Dr Onjefu Okeidu, blamed the non-implementation of the minimum wage on corruption, adding that if the cashless policy can be pursued vigorously, corruption in the high places can be curtailed.
hear him: “What the Central Bank of Nigeria (CBN) is doing now is quite impressive. You know that people don’t really want to face stress and enjoy later. You know that they are talking about naira redesign. All those measures like naira redesign, the Nigerian card, Afri-Go are measures to bring down inflation in a way because Nigeria is spending a lot of money on these foreign cards.
“There are lots of money that people have kept at home. There is too much money in people’s houses. If people collect money and keep it, how do you buy and sell? How do you function as an economy?
“By the time the CBN policies come into place, I am sure there will be improvement in inflation. And I am sure the labour will realise what the government has done. I think things will change to some extent. It’s not easy.
People are not finding it easy. But I think things will take shape because at the end of the day we are heading towards a cashless society. If we operate a cashless society, some of these indicators will go off or will be reduced. Corruption, for example, will be reduced. Corruption is part of our problem that is damaging our economy. If the government is monitoring the movement of money, it will be able to know if anybody is laundering money. All those ones will bring in positive results for the economy. People are doing whatever thing they like.
“I think the major thing that is affecting us is corruption. If corruption is reduced, there will be money to pay all those things. How much is N30,000 minimum wage? That cannot even take anybody to his farm not to talk of taking the person to his house. If the government can go cashless, all those things will be reduced.”