Nigeria: Buhari - I'm Committed to New Minimum Wage

President Muhammadu Buhari approves new monthly minimum wage.
7 November 2018

President Muhammadu Buhari yesterday expressed his commitment to having a new National Minimum Wage Act in the very near future.

The president spoke at the State House while receiving the report of the Ama Pepple-led tripartite committee which recommended N30,000 as the country's new national minimum wage.

Pepple, a former Head of Service of the Federation, said the committee carefully weighed the demand of the workers which was predicated on the high cost of living occasioned by unfavourable exchange rate and rising inflation over the past few years, among other factors.

"After carefully weighing these critical factors and bearing in the mind the overriding interest of the economy, the committee noting the offer of N24,000 by the federal government, is recommending an increase in the existing National Minimum Wage from N18,000to N30,000," she said.

The former Head of Service of the Federation said the implementation of the recommended minimum wage will boost the purchasing power of workers, increase consumption expenditure and stimulate business and overall economic growth.

Pepple said the committee, which was constituted on November 27, 2017 by the president, has also produced a draft National Minimum Wage Bill 2018 for consideration by government.

"We strongly believe that the enactment of the draft bill into law is very critical to the operation and future reviews of the National Minimum Wage," she said.

Responding, President Buhari, while restating his commitment to a new minimum wage act, said prices of key consumables had increased and that the most vulnerable of the country's workers were struggling to make ends meet.

"Since 2011, many changes have taken place. Nigeria rebased its GDP to become the largest economy in Africa. We reported very strong GDP growth rates and exceptional performance of our capital markets. However, these reported successes did not flow into the pockets and homes of majority of Nigerians.

"In the last three years, we focused on correcting this deficiency. We are working to create a diversified and inclusive economy. We are pushing to clear pension arrears owed to our retired workers with the limited resources available to us," he said.

According to the president, "The Committee Chairman highlighted some of the challenges encountered during your deliberations, especially as it relates to having a consensus position acceptable by all parties.

"I understand, on the government side, the concerns raised were around affordability - that today many states struggle to meet their existing salary requirements. On the side of labour, the points raised focused on the need for any increase to be meaningful.

"In a way, both arguments are valid. I want to assure you all that we will immediately put in place the necessary machinery that will close out these open areas. I am fully committed to having a new National Minimum Wage Act in the very near future."

He appealed to workers and their leaders to not allow themselves to be used as political weapons.

"As the Executive Arm commences its review of your submission, we will continue to engage you all in closing any open areas presented in this report. I therefore would like to ask for your patience and understanding in the coming weeks," he said.

All committee members signed report - NLC president

Speaking to journalists after the presentation, the President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba, said every member of the tripartite committee signed the report.

He said the agitation for the national minimum wage was not connected to the forthcoming general elections in the country.

On the capacity of state governments to pay the N30,000, he said "the N18,000 was being paid from 2011 to 2015 until when most of the states emptied their treasuries before elections.

"It was coincidence. In 2011, it was almost at the same time. At whatever time the minimum wage is due, it is our responsibility to raise the issue," he said.

However a source at the Nigeria Governors' Forum (NGF) said while the president's endorsement means that federal civil servants would earn N30, 000 as minimum wage, it may not be the same for state workers as governors have said they do not have the resources to pay the amount.

The source added that the governors' forum did not insist that all states must pay N22, 500 but said those who have capacity to pay N30, 000 minimum wage should go ahead and do so.

Briefing journalists last week, Chairman of the forum, and Governor of Zamfara State Abdul'aziz Yari said it was their position that since the percentage of salaried workers is not more than 5% of the total working population, their position must not just reflect a figure, but also a sustainable strategy based on ability and capacity to pay.

N30,000 wage will cause inflation - Umahi

Governor of Ebonyi State David Umahi said the proposed N30,000 national minimum wage would cause inflation and asked civil servants to look beyond the minimum wage.

He spoke Monday night when fielding questions from journalists at the Presidential lodge, Abakaliki where he inaugurated his re-election campaign.

"If you say something is wide, we should be able to say how wide it is. I believe that if we harness the resources of this country we will have enough to take care of our workers and we will have enough to take care of our health, education and others.

"Civil servants should look beyond minimum wage, even the minimum wage of thirty thousand naira cannot solve their basic needs,

"The reason is that it will cause inflection which is going to sweep out whatever gain you think you have. I think we are approaching this issue of minimum wage very wrongly," he said.

We must pay a living wage - Expert

Commenting on the impact of the new wage on inflation, Professor of Economist, Derin Ologbenla of the University of Lagos said: "We must pay a living wage. That is certain amount of money to the workers so that they feed. The question of poverty is based on the inability of government to pay a living wage.

"The workers will buy goods and services and the money will boost the economy of the country."

He argued that most state governors do not understand the impact of paying a living wage.

Ologbenla said: "The private companies know these. We the intellectuals think it is man's inhumanity to man for a Nigerian not to earn N1,000 a day and also expected to pay tax.

"So it is a lie that this could trigger inflation. When the senators have N13 million a month, did it cause inflation."

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