Opinion
Minimum Wage And The Revenue Debate (I)
In November 2010, the National Council of State (NCS) okayed President Goodluck Ebele Jonathan’s proposal on the N18,000.00 minimum wage structure.
Apparently, the NCS ratified the increase in the country’s minimum wage from the former N7,500 to improve the dispiriting living condition of the workers. According to media reports, the NCS deliberated extensively on the need for a new minimum wage for Nigerian workers before the ratification. And following the approval, the council (NCS) advised President Jonathan to send a Bill to the National Assembly requesting it to enact the N18,000.00 as a minimum wage not only for the federal government but also for workers in the services of state governments and other employers of labour including private organisations with 50 or more employees on their payroll.
The NCS is composed of the President, Vice President, Senate President, Speaker of the House of Representatives, the 36 governors, past Heads of State, Chief Justice of the Federation, Attorney General of the Federation and Minister of Justice. The council which is an advisory body is presided over by the president.
Nigerian workers, like their counterparts across the world have continued to demand for salary increase and improved conditions of service over the years. In spite of a barrage of labour decrees enacted during the military rule in the country, Nigerian workers particularly those in the public service still secured a minimum salary of N100.00 for the West African School Certificate holders in 1978. And in 1981,1988,and 1998, the minimum wage for workers rose to N125.00, N250.00, and N3,500.00 respectively.
Thus, even the military regime recognised the legitimacy of workers to participate in decisions affecting their interests and to make demands for a better working condition. Indeed, apart from setting up the National Industrial Court as the last institution in the apparatus for settlement of trade disputes, military administration established a central labour organisation in the country with funds to build its administrative infrastructure and acquire the strength and ability for the leadership of its constituent unions.
So Nigerian workers expect such a democratic administration as this to respond more positively to the needs of workers without much ado, as raising their socio-economic wellbeing would strengthen them as veritable instruments of social change and national progress. This is to say that there should be no further delay by both the public and private sectors in paying the N18,000.00 minimum wage which has been signed into law by President Jonathan.
Wage increase gives workers and their families the confidence that their level of living and quality of life would not, in so far as possible, be eroded by any social or economic contingency, including inflation. It strengthens the worker’s feeling of security and helps him or her to make possible socio-economic adjustments.
Considering the present revenue allocation formula in which the federal government takes 52.68 per cent of the centrally collected revenues in the distributable pool account with the states and local government councils having only 26.72 per cent and 20.60 per cent respectively, it will certainly not be easy for some governors to pay the new minimum wage which has become binding on the public sector and private organisations with 50 or more employees.
This is the crux of the clarion call by the Governors’ Forum headed by the Rivers State Governor, Rt Hon. Chibuike Rotimi Amaechi for a review of the revenue allocation formula. At the inaugural meeting of the forum, Governor Amaechi was quoted as saying: “Some States will need to go a-borrowing to be able to pay the new wage” According to media reports, the forum has already set up a revenue panel with the Lagos State governor, Babatunde Fashola as its chairman. The panel’s recommendation that the federal government should retain 35 per cent of the centrally-collected revenue and give to the states and local government councils 42 per cent and 23 per cent respectively has been forwarded to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) for its inputs and transmission to the National Assembly as a bill. But until the document is signed into law the states and the local government councils will have to contend with the present revenue allocation formula which they feel does not reflect the principle of true federalism.
Strictly speaking, revenue allocation constitutes a fundamental problem in federal finance due to, among other things, the organic structure of the system. As observed by B.O. Nwabueze in his book, “Federalism in Nigeria under the Presidential Constitution: “Federalism presupposes that the national and regional governments should stand to each other in a relation of meaningful independence resting upon a balanced division of powers and resources sufficient to support the structure of a functioning government able to stand on its own against the other”.
The solution to the ding-dong between the states and their workers on the payment of the new minimum wage on one hand and the states versus the federal government over the review of the revenue allocation formula on the other hand is to be found in the practice of true federalism by the Nigerian state.
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Empowering Youth Through Agriculture
Quote:”While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries”.
The Governor of Rivers State, Sir Siminalayi Fubara, recently urged youths in the Rivers State to take advantage of the vast opportunities available to become employers of labour and contribute meaningfully to the growth and development of the State. Governor Fubara noted that global trends increasingly favour entrepreneurship and innovation, and said that youths in Rivers State must not be left behind in harnessing these opportunities. The Governor, represented by the Secretary to the State Government, Dr Benibo Anabraba, made this known while declaring open the 2026 Job Fair organised by the Rivers State Government in partnership with the Nigeria Employers’ Consultative Association (NECA) in Port Harcourt. The Governor acknowledged the responsibility of government to create jobs for its teeming youth population but noted that it is unrealistic to absorb all job seekers into the civil service.
“As a government, we recognise our duty to provide employment opportunities for our teeming youths. However, we also understand that not all youths can be accommodated within the civil service. This underscores the need to encourage entrepreneurship across diverse sectors and to partner with other stakeholders, including the youths themselves, so they can transition from being job seekers to employers of labour,” he said. It is necessary to State that Governor Fubara has not only stated the obvious but was committed to drive youth entrepreneurship towards their self-reliance and the economic development of the State It is not news that developed economies of the world are skilled driven economies. The private sector also remains the highest employer of labour in private sector driven or capitalist economy though it is also the responsibility of government to create job opportunities for the teeming unemployed youth population in Nigeria which has the highest youth unemployed population in the subSahara Africa.
The lack of job opportunities, caused partly by the Federal Government’s apathy to job creation, the lack of adequate supervision of job opportunities economic programmes, lack of employable skills by many youths in the country have conspired to heighten the attendant challenges of unemployment. The challenges which include, “Japa” syndrome (travelling abroad for greener pastures), that characterises the labour market and poses threat to the nation’s critical sector, especially the health and medical sector; astronomical increase in the crime rate and a loss of interest in education. While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries.
While commending the Rivers State Government led by the People First Governor, Sir Siminilayi Fubara for initiating “various training and capacity-building programmes in areas such as ICT and artificial intelligence, oil and gas, maritime, and the blue economy, among others”, it is note-worthy that the labour market is dynamic and shaped by industry-specific demands, technological advancements, management practices and other emerging factors. So another sector the Federal, State and Local Governments should encourage youths to explore and harness the abounding potentials, in my considered view, is Agriculture. Agriculture remains a veritable solution to hunger, inflation, and food Insecurity that ravages the country. No doubt, the Nigeria’s arable landmass is grossly under-utilised and under-exploited.
In recent times, Nigerians have voiced their concerns about the persistent challenges of hunger, inflation, and the general increase in prices of goods and commodities. These issues not only affect the livelihoods of individuals and families but also pose significant threats to food security and economic stability in the country. The United Nations estimated that more than 25 million people in Nigeria could face food insecurity this year—a 47% increase from the 17 million people already at risk of going hungry, mainly due to ongoing insecurity, protracted conflicts, and rising food prices. An estimated two million children under five are likely to be pushed into acute malnutrition. (Reliefweb ,2023). In response, Nigeria declared a state of emergency on food insecurity, recognizing the urgent need to tackle food shortages, stabilize rising prices, and protect farmers facing violence from armed groups. However, without addressing the insecurity challenges, farmers will continue to struggle to feed their families and boost food production.
In addition, parts of northwest and northeast Nigeria have experienced changes in rainfall patterns making less water available for crop production. These climate change events have resulted in droughts and land degradations; presenting challenges for local communities and leading to significant impact on food security. In light of these daunting challenges, it is imperative to address the intricate interplay between insecurity and agricultural productivity. Nigeria can work toward ensuring food security, reducing poverty, and fostering sustainable economic growth in its vital agricultural sector. In this article, I suggest solutions that could enhance agricultural production and ensure that every state scales its agricultural production to a level where it can cater to 60% of the population.
This is feasible and achievable if government at all levels are intentional driving the development of the agricultural sector which was the major economic mainstay of the Country before the crude oil was struck in commercial quantity and consequently became the nation’s monolithic revenue source. Government should revive the moribund Graduate Farmers Scheme and the Rivers State School-to-Land agricultural programmes to operate concurrently with other skills acquisition and development programmes. There should be a consideration for investment in mechanized farming and arable land allocation. State and local governments should play a pivotal role in promoting mechanized farming and providing arable land for farming in communities. Additionally, allocating arable land enables small holder farmers to expand their operations and contribute to food security at the grassroots level.
Nigeria can unlock the potential of its agricultural sector to address the pressing needs of its population and achieve sustainable development. Policymakers and stakeholders must heed Akande’s recommendations and take decisive action to ensure a food-secure future for all Nigerians.
By: Igbiki Benibo
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