N70,000 Minimum Wage: FG Begins New Salary payment

“Note that: the New National Minimum Wage as approved by Mr. President, is implemented this September 2024. The 35 per cent and 25 percent salary adjustment for staff on CONPSS, CONRAISS and CONPASS as approved by Mr. President is implemented this September 2024.

“One new MDA, FEDERAL UNIVERSITY TEACHING HOSPITAL WUKARI, was created and payrolled this September 2024 with 239 staff count and a gross amount of N52,322,098.82.”

“Attached are the hard and soft copies of the warrants for your approval and funding. Please accept the assurances of the warm regards of the Accountant-General of the Federation.”

In the breakdown attached, it was noted that the sum of N334,925,372,928.14 will be used to bear the cost for the over 1.2 million workers per month.

This means the government is expected to spend N4.019tn annually as its new wage bill.

Recall that the government had commenced additional revenue for the payment of the new minimum wage.

This development, which affected revenue distribution to states, was received with opposing views when an update on statutory allocation showed that the government transferred a sum of N200bn into the non-savings account at the August FAAC meeting, making a total of N595bn.

Reacting to the commencement of the new payment, the Organised Labour, comprising the Nigeria Labour Congress and Trade Union Congress, called on organisations and others to follow suit by starting payment of the new wage.

Benson Upah, spokesperson of the NLC, and Tommy Etim, deputy president of the TUC, made these statements in separate interviews with one of our correspondents in Abuja.

Commenting on the matter, NLC’s Upah when asked if the development is a good move, said, “Yes, I think so. We ask other entities to emulate this example.”

TUC’s Etim said, “FG’s committee on consequential adjustments already released a template, so, no one has any moral ground to delay the payment of the minimum wage. We now advise that all other parties follow suit and commence the payment of the new minimum wage.”

Another civil servant, who spoke to one of our correspondents on the consequential adjustment, said the increase was insufficient given the economic hardships caused by government policies.

The grade-level 12 officer said, “This salary increase I am seeing is too small compared to what we have faced in the last one year and the current economic hardship in the country. I think we have been deceived. Is this what we waited months for?”

Meanwhile, pensioners in the Southwest have insisted on its stand that organised labour should renegotiate the new minimum wage and renew its demand for a N250, 000 monthly salary in light of the current economic realities.

The General Secretary, Nigeria Union of Pensioners, Ekiti State Branch, Azeez Agbaje, told The Punch in Ado Ekiti that the collective decision of the pensioners in the Southwest at their zonal meeting last week had not changed.

Agbaje said, “No, the decision taken remains, especially since there has not been another meeting where the stand was reviewed, or to say we are not more interested in the issue.

“If you want to look at it critically, at the time of the negotiation, the fuel price was below the present price, and the decision or conclusion of the negotiation then was based on the fuel price.

“Therefore, now that the fuel price has changed, then there must be a change in the table. That was what we said, and it remains,” he said.

NUP Southwest Publicity Secretary, Dr Olusegun Abatan, who read the communiqué at the end of the zonal meeting to journalists last week, had said, “We found out that before the N70,000 was even implemented, the Federal Government had gone ahead to further increase the price of petrol. We concluded that the two labour centres that went into that negotiation were blindfolded and naïve.

“The Federal Government took advantage of the naivety and inexperience of Comrade Joe Ajaero and Festus Usifo by tricking them into accepting N70,000 with the promise that fuel prices would not increase. However, no sooner had they agreed to the N70,000, the Federal Government went ahead and increased the fuel price.

“To that extent, the South-West NUP is rejecting the N70,000 minimum wage that labour negotiated and advises that labour should return to the negotiating table and insist on the N250,000 they initially wanted.

“Before you know it, the N2,000 that the Federal Government said it was going to increase the fuel price to will eventually emerge. Labour should go back to negotiate a N250,000 minimum wage. They have our backing on whatever it involves, even strike action, to achieve a realistic minimum wage.”

Amid the issues, the organised private sector bemoaned a threat by the government to jail private companies who don’t comply with the new salary structure.

Reacting to the possibility of jailing private sector operators that failed to pay the N70,000 minimum wage, a facilitator with the Nigerian Economic Summit Group, Dr Ikenna Nwosu, said nobody would go to jail unless there was a law to that.

“Whether they say it or not, nobody would go to prison unless there was a law that says so because a judge can only convict or sentence someone if there is a law that says so,” he said.

He argued that the Federal Government lacked the power to legislate minimum wage for everyone.

“In my opinion, the Federal Government can’t legislate minimum wage for everyone; they can only do it for their work. To promote voluntary compliance you have to present the parameters for calculating the minimum wage, they have to present it to everyone, especially the private sector, to make them know it is important to comply.

“Are you telling me that a mechanic makes enough money to pay his workers N70,000 every month? A petty trader, how sure are you that they can pay? When you talk of the private sector, it is not only people with offices but petty traders.

“People will contest that, and if they don’t win in the Nigerian court, they will go to the ECOWAS court. With those economic parameters you can’t force the private sector to comply, rather you encourage them.”

Despite commending the FG for commencing the payment of the new wage, President, Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye, expressed concerns over the threat of imprisonment for defaulters.

“We urge the government to engage with stakeholders, including the labour unions, in a collaborative manner to address their complaints regarding the alleged breach of contract on the increase in the price of fuel and the economic challenges facing businesses and workers.”

The National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, noted that the association strongly supported that workers should be paid well.

He said, “The bulk of the employers of labour are the MSMEs who account for 84 per cent of employment. However, as much as we would love to improve the livelihood of our workers by paying them N70,000 or more, with the current economic realities, the majority of SMEs may not be able to pay this minimum wage.

“This may force SMEs to reduce staff strength while some may eventually close business. We are struggling to survive this time. Our profitability and productivity have reduced sharply. We are contending with many challenges and at this point, small businesses need government support and interventions to remain afloat in business and become healthy. It is after this we can financially be able to pay.

“While workers must get decent and good wages, the reality is that most SMEs just cannot afford to pay at this point. If the penalty would be imprisonment, then all our correction centres will soon overflow.”

The Director-General, Manufacturers Association of Nigeria, Segun Ajayi-Kadir, said manufacturers were paying salaries above N70,000 before the arrival of the new minimum wage policy.

Ajayi-Kadir said manufacturers had no challenge with compliance with the policy, but noted that some smaller businesses needed aid to pay or be forced to make business-informed decisions, including downsizing.

He said, “Even before the enactment of minimum wage at N70,000, most of the private sector has always paid even above that. The President told us that they were going to support the private sector to make the payment.

“However, there are some that are very small scale, that if they were to pay the N70,000, their businesses would not be able to sustain. So, I thought that they were the ones that the Federal Government intended to support.

“So, it’s not a question of compliance. It’s a question of survival. If you don’t pay, somebody can close your business.” Ajayi-Kadir added

The MAN official reasoned that manufacturers, who were eligible to pay, would not be willing to go against the new minimum wage and risk prosecution.

“They will make business-informed decisions, maybe to rationalise the staff because nobody wants to go to jail or maybe to close shop or, in a way, look at their processes to see how they can minimise the cost in other areas to enable them to be able to comply.

Ajayi-Kadir added that business owners were hopeful of government support

“We are looking forward to that kind of support for those who might be in the category of not being able to pay, even though the law requires them to pay. So, that support will be needed.

“Maybe it’s going to be in the form of some relief or some incentives. We don’t know what the government had in mind when they promised to support, but I believe that the government meant well.”

Ajayi-Kadir added that manufacturers were fully in support of the minimum wage, saying it would lead to customers having a higher disposable income.

He stated, “Don’t forget that we said that even in the first half of the year, the unplanned inventory of manufacturers was in excess of N1tn. So, who is going to buy it if not people that have money?

“So, we are interested that people should earn more. I would have loved that even the minimum wage is much higher so that people can have more money in their hands to buy. But whatever the minimum wage is, it must be matched with the ability to pay.”