Tuesday, May 10, 2016

Nigeria workers demand for N56,000 new minimum wage

The international workers’ day also known as May Day was celebrated last Monday. May 1 of every year has been dedicated since 1880s to celebrate the labour force globally.  In Nigeria, the day was marked with march past at stadia and symposia. Most significantly is the formal demand by Nigeria labour unions viz. Nigeria Labour Congress and the Trade Union Congress for a new minimum wage of N56, 000. This has been generating a lot of furore since it was made public. While a segment of Nigerian society believed that the workers unions are in order to demand for upward review of their wages; a sizable number of people have been castigating the labour unions for making unreasonable, ill-timed, and unrealistic demand. The latter group believed that with about 27 states allegedly owing backlog of salaries and pensions under the current minimum wage of N18,000; while many private enterprises are not able to break even let alone make profit due to the high cost of doing business in Nigeria,  it is implausible for  employers to pay the new minimum wage.

Labour unions have been stoutly defending their proposal for the new wage. They allegedly arrived at the new wage by multiplying the amount the federal government use in feeding a prisoner which is N300 per meal and N900 per day multiply by 30 days of a month in addition to housing, transport and other allowances. Also, since the last minimum wage came into force in March 2011 and it was meant to be reviewed every five years, workers not wanting to sleep on their rights, decided to push forward their case for the new wage. Furthermore, labour unions insist that despite dwindling oil prices and distributable income to the three tiers of government, if the chief executives, namely, the president, governors and Local Government chairpersons will readjust their priorities, they should be able to pay the new minimum wage. It is noteworthy that NLC/TUC are not under any illusion that government will adopt their proposal hook, line and sinker. They are not unmindful that the proposed N56, 000 is negotiable and that given the history of wage negotiation in Nigeria, it will take a long time to conclude hence, it is better to start early.

It is significant that since the last agreed minimum wage in 2011, state governors have been kicking against it and have on several occasions threatened to retrench workers if government will not review the revenue sharing formula to enable state and local government to earn more. Indeed, in November 2015, chairman of the Nigeria Governors Forum, Alhaji  Abdulaziz Yari of Zamfara State who addressed the press after their meeting said that the N18, 000 national minimum wage promulgated into law in 2011 was no longer sustainable because of the fall in the price of crude oil. The governor also claimed that the national minimum wage was ‘imposed’.

For the records, the last minimum wage was not imposed. 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 2011 one was in 2000 with effect from May 1, 2001. Then, the wage was set at a paltry N5,500. It took ten years to review that benchmark through a collective bargaining mechanism. 

Nigeria Labour Congress made a demand for wage increase in 2009 after a thorough study of the salary of political office holders’ pre and post consolidation, as well as careful examination of the minimum annual wage levels in African countries. The study shows that Nigerian worker is among the least remunerated in the world. In the NLC estimated cost of meeting basic needs for a representative family done in February 2009, a sum total of N58,500 was arrived at. NLC however decided to demand for a new national minimum wage of N52,200 which the Union considers approximate least Minimum Annual Wage Levels in African Countries, the minimum cost of providing basic needs for the worker and his/her immediate family and the cost of living data.

In order to negotiate this request from NLC and TUC, 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 4 cabinet ministers, three state governors and representatives of the National Salaries, Incomes and Wages Commission. Labour drew its representatives from the NLC and TUC, while representatives of the organised private sector include Nigeria Employers’ Consultative Association and those of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture. 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, dialoguing and negotiating with different stakeholders. It was reliably gathered that all the 36 State governors as well as the Nigeria Governors Forum 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 employer of labour to implement. It was also proposed that the new wage will apply to only organisation with a minimum of 50 workers in its employment. It was after this consensual agreement that the proposal was drafted into a bill and presented to the National Assembly for legislation. This bill was passed and signed into law by ex-President Goodluck Jonathan on March 23, 2011.

Enough of history! To my own mind, Nigerian labour unions are justified to request for upward wage review. The spiraling inflation, high cost of living and high dependency ratio due to mass unemployment have combined to make this imperative. Governor Adams Oshiomole of Edo State during the May Day 2016 celebration announced increase of minimum wage in the state to N25,000. Impressive and exemplary!  Perhaps by the time the negotiation committee that will be set up will conclude their assignment, the economy would have rebounded  to enable the employers to pay whatever is collectively agreed upon. I am in total agreement with NLC submission that the economic problems facing the states were caused by “serial acts of corruption in the past, failure to save for a rainy day, high cost of governance (via employment of unneeded aides on criminally high salaries), unlawful and equally unacceptable severance packages for ex-governors and their deputies, cost of political expediency, failure to invest, etcetera.”

Jide is the Executive Director of OJA Development Consult, Abuja.