Politics Of Minimum Wage …Between Necessity, Possibility

Ayuba and Kaigama

Since about the end of April, a week to this year’s Workers Day, on May 1st, when the Nigeria Labour Congress (NLC) reminded the country of the need for an upward review of the minimum wage, several positions have been canvassed, most dwelling on the vagaries of necessity and possibility.
Very few however, disagree that the law says, minimum wage should be reviewed after every five years, which is why the NLC is not perturbed by side comments questioning the feasibility of such upward review, at these trying times.
The reservation of Nigerians who consider the timing unrealistic point to the poor state of the economy, inability of most states to even pay the N18,000 minimum wage, free fall of the price of crude oil, the country’s major source of revenue and the worthlessness of the Naira on account of poor foreign reserves.
Organised labour is proposing N56,000 new minimum wage which comparatively is one of the lowest even in Sub-Saharan Africa. Amusingly, as soon as one faction of labour called for N56,000, the other proposed N100,000 apparently to out-do themselves and end-up diminishing the importance of the demand.
The first hindrance to the actualisation of the needed review, is thus, a disunited labour movement which nearly 15 months after elections remains divided from the national to the States. With such division, it is difficult for organised labour to make sense of the issue without being penetrated by fifth columnists.
How can a divided labour negotiate a new minimum wage at a time when, politicians need all the resources they can muster to fulfil their electoral promises, when payment of workers still remains an issue?
Prior to the signing of the 2016 Federal Budget into law, governors under the aegis of the Nigerian Governors’ Forum, (NGF) stormed the Aso Rock Villa to discuss the state of the States with President Muhammadu Buhari. Highpoint of the talks was the reality that most states could not pay salaries and are in arrears of unpaid workers wages. That was in spite of the fact that the Federal Government had given bail-out to some states.
Unfortunately, according to Federal Government sources, some states diverted such funds to more compelling needs, in their estimation, and let workers wallow in want and hunger. This means, even when all the resources are available, some states still would not consider workers salaries as priorities. To such states, the N18,000 minimum wage is a waste and which makes any review an impossibility.
As it is with the states, the Federal Government, according to sources borrowed to meet its N165billion monthly wage bill, an expenditure which the Finance Minister, Kemi Adeosun, last week described as unrealistic with the assurance that more ghost workers would be fished out of the system.
This means, the Federal Government from whom, the States hope to source funds for current salary challenges also needs help.
One of such challenges is how to fund the 2016 N6.6 trillion budget. With a Naira that is almost worthless on account of poor foreign reserves and volatile crude oil prices, infrastructure development, which is foreign exchange dependent, would be difficult.
Amidst the side comments of currency swap between China and Nigeria as a means of funding some Rail projects, amidst strong denials by the Federal Government, it is difficult to decide on what to believe. The fact remains however that with a budget benchmark of $38 per barrel, and US patronage of Nigeria’s gas export now zero, funding of the federal budget would be a huge challenge; a reason government officials have already advised Nigerians not to expect 100 per cent implementation.
These were why, rather than acede to the demands of states for review of the revenue allocation formula, the federal government queried what the States did with the bail-out funds given to them and promised that refunds would be made to states who were known to have invested on federal projects, particularly roads. How that would benefit all states and solve the problem of inability to pay salaries is another issue.
As it stands today, about 22 out of the 36 states of the federation cannot pay workers salaries as and when due. They also lack the potential to improve their internally generated revenue (IGP) profile, because they are used to hand-outs from the federal government, made possible by the oil boom.
Many Nigerians have at various times advised unviable states to consider merger while some others have canvassed a return to regional governments where the problems of the unviable states could be covered by the viable ones within the confederation. But a more realistic warning, years ago, was a return to agriculture and other mining activities, as a means of economic diversification.
Happily, there is no state of the federation that cannot survive on an export based resource, if properly harnessed. There is the abundance of minerals, cash crops, economic trees from which the groundnut pyramids of yester years were harnessed. But all those were abandoned in preference for hand-outs from the centre.
About three years ago, even when the United States stated clearly it would no longer have anything to do with Nigerian oil, when it became imperative that both the Federal Government and the states needed to source for alternatives to oil, the political class did little. Today funding democracy is a hard task just as running states seems impossible.
These are why many are asking, how realistic is the NLC demand? First, Nigeria is a federation which means states may demand the right to negotiate workers’ salaries based on available resources. That would, without any doubt, weaken the NLC’s powers to negotiate properly and achieve the required results. Another, as earlier pointed out, is the polarisation of the labour movement. There are today, two factions from the national down to nearly all the states.
All these notwithstanding, that the Nigerian worker deserves wage review is not in dispute. That the N18,000 old minimum wage is grossly unrealistic is a mathematical fact. That the N56,000 new minimum wage demanded by labour is realistic cannot be debated.
To be sure, if the political class had worked towards today, five years ago, the demand for a review would not be such a surprise and an issue. But Nigerians have a culture of creating controversy out of nothing, either to buy time or undermine the rights of others, in this case the ordinary worker.
With proper planning and management of resources, such salary review should not be such a big issue. After all funds expended on luxury automobiles for federal legislators, cost of avoidable foreign trips by the executive, huge salary bills of appointed and elected politicians and bloated contracts could be saved to implement the wage review.
Another is a deliberate policy of not importing what we can produce, save needed foreign reserves and improve the worth of the local currency. No economy that depends on imports for virtually everything can survive and that is the lot of the Nigerian economy and by extension the states.
To successfully effect wage review and give the worker a realistic salary to live on, states must first view the proposal as a top priority, a legal condition and an indispensable obligation. From this perspective, it will then be made clear, that any state unable to meet its obligations to the people would be merged.
This would without doubt create in the operators of the states, the required urgency to source for alternatives to the monthly hand-outs sourced from the centre.
It will surely make better meaning to states still thinking that all the calls for diversification of the economy is merely for the history books. That the moment for reckoning is now. Then and only then would the likelihood of a productive conversation over wage review be feasible.
Perhaps the most important imperative is the unification of the labour movement, to be able to speak with one voice and not from different platforms, that would be exploited by others on the negotiating table.
My Agony is that leadership of labour unions has become such gold mine that, like Nigerian general elections, the name of the game is now do or die. Defeat, is no longer an option as that would mean denial of the spoils of labour office.

Soye Wilson Jamabo