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New Minimum Wage: No Excuses, No Exceptions



President Muhammadu Buhari

The debate on the merits and demerits of a new minimum wage for Nigerian workers has been exhausted by President Muhammadu Buhari’s assent to the Bill enacting it, which is now a living and functional legal document that must be adhered to by employers of labour that have a  specified minimum number of employees in their organisations. The minimum wage law applies equally to employers of labour in the public and private sectors with effect from April 18, 2019.

The Minimum Wage Repeal and Enactment Act 2019 passed by the National Assembly and assented to by President Muhammadu Buhari has pegged a new national minimum wage of N30, 000 monthly. It has repealed the National Minimum Wage Act No.6, 1981.

The new Act says its provisions should apply throughout the Federal Republic of Nigeria: no excuses, no exceptions other than the exemptions provided for in the Act.

The exemptions are specified at Section 4(1) a-d, which exempted organisations employing less than 25 people;, just like in establishments where the workers are paid on commission or are employed as part-time staff and those working on vessels or aircraft to which the laws regulating merchant shipping and civil aviation apply. Section 4(2) gave discretionary powers to the Minister of Labour , through the National Labour Advisory Council, to grant other exemptions in the interest of the national economy.

All state governments and employers of labour must pay, except for those specified in the exemption provisions. Paying it is mandatory for at least the next five years when it would be subjected to a review.

A provision in the minimum wage Act says that it can be enforced by an aggrieved worker, a Trade Union and ultimately the Minister of Labour. There are penalties against defaulters of the law in the form of fines. All possible loopholes to dodge its implementation were blocked.

As there is no excuse or exemptions for state governments regarding the payment of the new national minimum wage, their best options include spending money on frivolous activities and events; cultivate the habit of compact cabinets; reduce the number of special advisors and assistants; curve the crave for grandiose projects like a five-kilometre flyover for N15 billion or the construction of huge structures that are not functional and poorly maintained.

State Governments should also be up and doing in internal revenue generation at their busiest markets, motor parks and bring more tax-payers into the tax net. All these steps can be taken once the political will is put into action.  All unrealistic severance packages should be reviewed downward to save funds for renovating and building new schools, hospitals and basic water supply system, and of course, paying the new minimum wage.

Readers may remember that it was in 2017 that the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), jointly revived and escalated a demand for a new minimum wage of N56, 000 to replace the current N18, 000 monthly minimum wage.  They argued validly that N18, 000 as salary per month is inadequate for any employee spending their income in Nigerian markets.

The successful agitation was re-started by labour when many state governments lacked the money to pay the extant minimum wage N18, 000 and owed workers salaries for many months. Additionally, the states were indebted to contractors who either executed projects or supplied goods.  Everyone thought that the labour movement was merely flying kites, testing the waters.

Nevertheless, it is noteworthy that while governments at the state and federal levels were resisting N18, 000 minimum pay for being excessive, they appropriated for themselves millions of Naira annually as salaries and allowances, including a very generous severance package at the end of their tenures.  The latest of such outrageous greed was by the Bayelsa State House of Assembly which passed a law allocating pension and other privileges to themselves for life. This brazen attempted access to the treasury through legal means should be resisted nationwide.

It is appropriate to recall that this was not the first time the NLC demanded for a new national minimum wage. It made the first demand in 1981 when it was led by Mr. Hassan Sunmonu. Research conducted for writing this item indicate that the NLC demanded N300 as national minimum wage.  President Shagari’s administration approved N125 as national minimum wage. In 1989/1990, during the Babangida regime, the NLC led by Pascal Bafyau successfully negotiated a higher minimum wage of N250 monthly, which was raised to N3, 000 per month by the administration of General Abubakar Abdulsalami.

Between 2000 and 2001, another round of negotiation for a minimum wage, ended in N5, 500 minimum wage for state workers and N7, 500 for federal workers and workers of oil producing states. The agreement was with the caveat that there would be a 15 per cent increase in 2002 and 25 per cent increase in 2003.  This was not upheld by the government side.  The labour bided its time until an appropriate atmosphere presents itself for the agitation to restart.

The just ended N18, 000 minimum wage was negotiated and agreed upon in 2010 under the presidency of Dr. Goodluck Ebele Jonathan.  The Executive and the National Assembly agreed with the NLC that it would be reviewed every five years, but the agreement for periodic review has not been adhered to by the employers for several reasons.

As stated earlier, the NLC and the Trade Union Congress (TUC) resumed their agitation in 2017. After intense negotiations and a warning strike, the states and federal governments offered N25, 500 and N28, 000 respectively as minimum wage.  Labour rejected the offers. As legislation was required to give the new minimum wage legal support, the Executive transmitted a bill to the parliament for the new minimum wage it offered. The National Assembly raised it to N30, 000 monthly, which labour accepts.

Two potential areas of conflict between labour and government are labour’s preferred commencement date of May 1, 2019 for the new minimum wage, and the likely increase in taxes by government to generate more revenue and pay it.  Labour has got what it wanted by law, states and the federal government should also enjoy the benefit of using the best means available to raise money and meet the new obligation.

The new minimum wage is timely. Inflation has rendered the former N18, 000 inadequate for a single individual worker, talk less of a family. This clearly justifies and made the introduction of the new minimum wage of N30, 000 very desirable in Nigeria.

Dambatta, a former director in the Federal Ministry of Finance, writes from Abuja


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