The Federal Government is considering addressing the challenges arising from the removal of fuel subsidies through a dual strategy, as reported by Vanguard and Empowered Newswire sources. This strategy entails providing relief measures to mitigate the impact of subsidy removal and implementing a minimum wage of N200,000, which has been proposed by labor unions. The current processes for determining the minimum wage, which the government is not currently following, may lead to a potential clash between labor unions, the organized private sector, and the Federal Government.
It should be noted that the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have demanded an increase in the minimum wage to N200,000, stating that the current N30,000 wage is insufficient to alleviate the effects of fuel subsidy removal. The demands put forward by the President and Secretary-General of TUC, Festus Osifo and Nuhu Toro, respectively, include not only a higher minimum wage but also tax holidays for employees earning less than N200,000 or $500 monthly, the introduction of a Petroleum Motor Spirit (PMS) allowance for specific income brackets, and a stable exchange rate for retailing PMS.
However, Vanguard sources reveal that while the Federal Government is inclined to pay the N200,000 minimum wage, state governors have expressed their inability to meet this requirement, just as they did when the minimum wage was raised to N30,000 in previous years. As a result, a technical working group led by Anambra State Governor Charles Soludo has been established to address the technical details and resolve the issues surrounding the minimum wage proposal.
During a National Economic Council (NEC) meeting led by Vice President Kashim Shettima, the Salaries, Incomes, and Wages Commission assured that the government could fulfill the responsibility of paying the N200,000 minimum wage per month. They cited the savings from subsidy removal and the fluctuation of the value of the naira as potential funding sources. However, the state governors raised concerns and questioned the proposal, expressing doubts about their ability to meet the payment obligations.
In light of these developments, a sub-committee was formed during the June NEC meeting to review the situation and provide recommendations. The committee consists of governors from different regions, representatives from the federal government, Organised Labour (TUC and NLC), and Ms Rukayyat El-Rufai. The technical working group led by Charles Soludo has met several times in June to examine issues related to the new minimum wage, with an understanding that both federal and state governments will be responsible for its implementation.
The report of the sub-committee will be presented at an upcoming NEC meeting later this month, where a final decision on the National Minimum Wage will be made. The decision will then be forwarded to the President for consideration as advisory. It is worth noting that the minimum wage will be reviewed again in 2024.
NLC President Joe Ajaero has stated that the government’s current efforts do not meet the criteria for a minimum wage, referring to them as mere wage awards akin to the Udoji awards of the 1970s. He emphasized the need to differentiate between a wage award and a minimum wage, stating that a wage award could be implemented immediately without waiting for the statutory period. He also highlighted the lack of compliance by state governors with the Minimum Wage Act, expressing skepticism regarding their ability to pay even the current N30,000 minimum wage.
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