The United Labour Congress (ULC) has described the proposed industrial action planned by organised labour following the ultimatum issued for the full implementation of the new minimum wage, and the consequential adjustments of salaries for civil servants as a failure.
The ULC in a statement issued by its President, Joe Ajaero, added that the labour centre will not be a part of the exercise that ‘makes a mockery of the genuine struggle by Nigerian workers’.
In series of meetings this week, representatives of the organised labour made up of the Nigeria Labour Congress, the Trade Union Congress and the Federal Government have failed to reach an agreement on percentage increase in salary for civil servants from levels 7 to 17.
“Nigerian workers cannot be forced to negotiate from a position of weakness as in this case? Why would we want to go into a nation-wide strike without mobilizing all the national stakeholders and Civil Society organisations such as Market women, Students, faith-based organisations, Community Associations etc? Why the concerted effort to ensure that the critical sectors that would make for a successful strike are consciously sidelined?
“Obviously, the proposed nation-wide strike is designed to fail or at best watered down to achieve nothing but to bring few Nigerian workers on the street to dance and wave flags without shutting down the economy which is the effect a nation-wide strike ought to have. Markets will be open, Road, Maritime and Air transports will work, Filling stations and Depots will operate, banks will work and generally, the economy will go about its business as if nothing has happened so, where is the effect of such action? he asked.
According to Ajaero, the minimum wage increase which the ULC was a part of at the initial stage has been subjected to ‘abuse and battering’, and Nigerian workers should not be forced to negotiate from a position of weakness.
“We were part of the 16-Man Technical Committee that gave birth to the Tripartite Committee on the Review of the National Minimum Wage and in which we participated vigorously in all the processes leading to its negotiation and the various struggles to deliver it for the benefit of Nigerian workers and peoples.
“Unfortunately, this strike will not have the desired impact and would not achieve the intentions Nigerian workers would want as it is seemingly; dead on arrival as programmed by the hidden interests pushing the agenda.
“ULC will not, therefore, be part of an exercise designed to hoodwink Nigerian workers and masses into believing that their interests were being championed while the contrary may be the case. We will not be part of this ruse neither will we partake in a complete jamboree that makes a mockery of the genuine struggle by Nigerian workers to begin to enjoy the new national minimum wage,” the statement added.
The first president of the Nigeria Labour Congress (NLC) Hassan Sumonu has called on both the Federal Government and state governments as well as other employers of labour to commence the implementation of the N30,000 new National Minimum Wage for workers in the country on or before May 2019.
In an exclusive interview with Channels Television in Kaduna, the former NLC President said the new minimum wage which has been signed into law by president Muhammadu Buhari is non-negotiable and therefore, is binding on all employers of labour in the country to implement immediately without further delay.
He called on the Federal Government and labour movement to ensure effective sanctions for employers who refuse to implement the N30,000 National Minimum Wage.
On his part, the General Secretary of Textile Workers Union of Nigeria, Issa Aremu said it is a criminal offence if any state government or private employer fails to implement the new minimum wage.
He added that adding workers now have the constitutional right to go against any employer that fails to do so.
While commending President Muhammadu Buhari and the National Assembly for the passage of the new minimum wage into law, Aremu maintained that the state governors have no excuse not to commence implementation of the minimum wage immediately it was passed by President Buhari.
He however vowed that Nigerian workers will not hesitate to use all Legal means including industrial action against any defaulting employer.
The Chairman, Presidential Technical Advisory Committee (PTAC), Mr Bismarck Rewane, has said that if there is no increase in productivity, the value of increased wages will reduce to a point.
Rewane who was a guest on Channels Television’s Sunrise Daily, explained that the point is to look for ways to improve workers productivity by providing investment opportunities for businesses to thrive.
He also stated that labour productivity in the last five years has been negative, which has led to an increase in the poverty index.
“In the past 5 years, labour productivity has been negative. Poverty is a function of productivity, even if I increase your salary if there is no increase in productivity, the value of your salary will reduce to a point.
“What we should be looking at is how to ensure that the Nigerian workers can be productive by providing new and existing investments; power, energy, petroleum, manufacturing, agriculture.”
He further explained that investments needed, can only come if the investors are certain that there will be returns.
“Investment comes about because people know that they will get a return in investment; the return is a function of pricing.
“The moment people know that the pricing is now business friendly and it makes sense, investments will come in and within months you will see the impacts and the trends will be there. Investments will go into power, refining of petroleum products, pipelines, airport concessions.”
The presidential candidate of the Young Progressives Party (YPP), Professor Kingsley Moghalu, has described the current Nigerian minimum wage of N18,000 as a ‘poverty wage’, and is calling for better, more sustainable pay for workers.
He said this in a statement dated October 22, 2018, noting that those who earn the current minimum wage, live on $1.67 per day – a situation he describes as tragic.
His comments come amidst the ongoing disagreements between the government and labour leaders over the amount to be fixed as the new minimum wage.
While the Federal Government says it is capable of paying N24,000, state governments say they are only capable of paying N22,500, as against the N30,000 requested by the workers.
Amidst the disagreements, failure to reach a conclusion and meet the demands of the workers, they (the workers) have threatened to embark on another industrial action starting from November 6.
Moghalu, however, says if he is elected President in 2019, he has plans to quickly facilitate agreements on a new minimum wage.
Read his full statement below.
NIGERIAN WORKERS NEED A HIGHER, SUSTAINABLE MINIMUM WAGE – MOGHALU
Professor Kingsley Moghalu, the presidential candidate of the Young Progressives Party (YPP), has said that Nigerian workers need a higher minimum wage that is sustainable.
He, therefore, plans to quickly facilitate agreement on a new minimum wage, if he is elected President in 2019.
“The current minimum wage of N18,000.00 per month is a poverty wage,” said Moghalu.
“At the prevailing exchange rate in the parallel market, which is the most accessible forex market for most Nigerians, our fellow citizens who receive the current minimum wage are living on $1.67 per day.
“This is tragic, and it indicates one of the things that government must do to reduce extreme poverty in the country. The global benchmark for extreme poverty is living on $1.90, or less, per day.”
Moghalu said he has been monitoring the protracted negotiations for a new minimum wage between President Muhammadu Buhari administration and the labour leaders.
He said a token increase will not do, and neither would a decision that is inspired by populist political promises that are not implementable or sustainable.
“I will bring insight and expertise in economic management to lead a quick review and decision on the minimum wage,” said Moghalu, a former deputy governor at the Central Bank of Nigeria (2009 – 2014), who later became a Professor of the Practice in International Business and Public Policy at the Fletcher School of Law and Diplomacy, Tufts University in Massachusetts, USA, from 2015 to 2017.
The National Minimum Wage (Amendment) Act 2011 raised the minimum wage from N7,500 to N18,000. In recent years, however, many states of the federation have been defaulting in meeting their salary obligations to their workers.
Salary arrears run into five months and above in many states.
At the federal level, the non-debt recurrent expenditure is N3.5 trillion in the 2018 budget and debt service obligation is N2.01 trillion.
The addition of both figures, N5.51 trillion, amounts to 78% of the projected total government revenue for the year.
This raises the question as to how to fund a larger wage bill without recourse to borrowing.
Moghalu believes that Nigeria needs to borrow less. He believes that the analysis of Nigeria’s debt sustainability can no longer be anchored on the debt-to-GDP ratio.
At 21.3% in 2017, the debt-to-GDP ratio gives false assurances that Nigeria can continue to borrow without negative consequences, as the Buhari administration has been doing.
Moghalu believes the more realistic metric would be the percentage of debt service to total revenue.
Based on actual revenue in the preceding fiscal year, and not projected revenue figure, 63% of government revenue was used for repaying debt in 2017, according to the International Monetary Fund (IMF).
This ratio may likely grow in the coming years, if there is a downward trend in the price of oil in the international market, or if Nigeria’s production volume declines for any reason.
Moghalu believes that a new minimum wage should be closer to double the current N18,000.00.
The rationale for this is the need to start pushing back on the growing number of extremely poor Nigerians. 87 million Nigerians, which account for about 45% of the population, now live in extreme poverty.
Nigeria also has a high dependency ratio; whereby, social support is provided by family and friends to more hapless relations.
To fund a higher minimum wage, Moghalu plans to eliminate the petroleum subsidy; increase tax revenue by ensuring more individual and corporate citizens (including informal sector operators) pay their taxes to the government; and remove labour redundancy in the public service.
Elimination of the subsidy on petrol will save the government up to N500 billion yearly.
This assumption is based on the average value of the subsidies paid to the product marketers in the 10-year period between 2006 and 2015.
Ending the long regime of petrol subsidy will bring closure to a wasteful government expenditure that has benefitted the rich far more than the poor, encouraged corruption, stymied local refining capacity and inhibited job creation in the downstream sector of the oil industry.
When Nigerians trusted the APC government of President Muhammadu Buhari to address the petrol subsidy conundrum in 2015, he was short on the political will to do so.
Instead, he merely increased the price of petrol by a whopping 49%, from N97 per litre to N145 per litre. Nothing more. Therefore, Nigerians are paying higher prices for petrol now, while all the aforementioned problems with petrol subsidy have remained.
To increase government’s tax revenue, Moghalu plans, as President, to establish a Social Contract with the Nigerian people.
He plans to make the public procurement process more transparent and efficient for radically improved public service delivery. He also plans to introduce forensic audit to the budgetary process to address the problem of budget padding.
His plan to maintain a database of procurement items will check inflation of government contracts and ensure more value for every naira spent by the government.
It is envisaged that these will improve voluntary compliance to payment of taxes.
Through the automation of government’s revenue-generating institutions, Moghalu targets 100% remittance of government revenues.
To cushion the effect of taxes on businesses, Moghalu plans to squarely address the perennial problem of power supply to businesses and industries. To achieve this, a number of reform measures in the power industry will be introduced, while some existing ones will receive a new fillip for effective implementation.
Moghalu plans to unlock private sector investment in the power sector by decentralising the national grid and phasing in a regime of commercial tariff.
Access to public power supply from the existing hydro and gas-fired power plants will be prioritised for the industrial zone in Lagos, Ogun, Kano, Kaduna, Aba, Onitsha and Nnewi, and new ones would be set up in close proximity to the major power plants. Policy support for captive power generation will also receive a boost.
These measures will drastically reduce the cost of self-generation of power mainly by using the generators. Because of the heavy reliance on generators, energy cost accounts for up to 60% of the operating expenditures of many businesses in the country. With the provision of public power supply on 24/7 basis, the prices of products and services will crash, business volumes will grow, and profitability will improve.
With the elimination of the negative incentives for tax avoidance, the government will become tougher on tax defaulters. Overall, tax revenue for the government is expected to increase by 20%, year-on-year, from the second year of the administration of Moghalu, if elected in 2019.
Moghalu plans to deliver improved performance in the effort to remove ghost workers from the government payroll. His administration (in prospect) will complete biometric registration of all government workers and link their staff numbers to their individual Bank Verification Number (BVN).
It should be noted that Moghalu supervised the introduction of the BVN in the payment system when he was Deputy Governor, Operations, at the Central Bank of Nigeria.
By bringing headcount of government workers to reality, his administration will eliminate those who, literally and figuratively, have no place in the government offices, raise productivity and save up to N50 billion from the wage bill over three years.
Certainly, there are risks to a sharp increase in the minimum wage. The risks include inflationary pressure; tighter labour market conditions, which may include layoffs of a large number of workers across the public and private sectors; slower job creation; and labour market upheaval from general strikes.
This is the reason an increase in the minimum wage must be accompanied by other fiscal reforms, which are adaptable by the state governments.
Nevertheless, Moghalu, who is a professional risk manager, maintains that “a realistic upward adjustment of the minimum wage can motivate higher labour productivity, especially in a frontier market like Nigeria.
It is impossible to lift Nigerians out of poverty by paying ‘poverty wages’ to government workers.”
He said one of his three major policy goals is to fight and win a decisive war against poverty and unemployment in Nigeria.
But there is no indication yet that the current review of the minimum wage has benefitted from the necessary insights and expertise. Like in several areas that the Buhari administration has failed to perform, the much-anticipated national minimum wage may end up as a vacuous political promise, especially because the negotiations have lingered into the 2019 campaign season.
“Based on our experience with the dismal performance of President Buhari’s populist campaign promises, Nigerians should be suspicious of utopian promises by any of the presidential candidates regarding unsustainable increases in the minimum wage ahead of the 2019 elections,” said Moghalu.
“What we need now is someone who is competent in economic management as President in 2019,” he concluded.
Official Spokesman for Presidential Candidate, Professor Kingsley Moghalu and his ‘To Build A Nation’ (TBAN) movement.
An economist, Dr. Austin Nwaeze, has stressed the need for a restructuring of the system of government that Nigeria is practicing, saying the current system is not sustainable.
The lecturer with the Pan Atlantic University told Channels Television on Tuesday that the Presidential System of Government was too expensive and should be dropped.
“We need to restructure the states. We are carrying excess as if we are a developing state.
“We need to really trim down the size of government and then encourage people to go into industries and make policies that will encourage industries to employ more people.
“There is no developing economy that runs the system that we run and grows the way it should grow.
“All the other nations that have grown came from a system that they could manage and gradually grow.
“The system we run is for a developed economy which they use to stabilise the system,” he insisted.
Dr. Nwaeze suggested that Nigeria should have a home-grown system and not a presidential system of government, stating that it was part of their suggestion at the National Conference held by the last administration, which recommendations have not been implemented.
“We have suggested that we should run a system that does not have two arms of legislature – the Senate and the House of Representatives,” he said, citing a recommendation made by the conference.
He suggested that the number of legislators should be 36, one representing each state, with the number of ministers further reduced to five.
“Eighty per cent of what is paid in the National Assembly for instance is personnel cost,” he said.
On how the restructuring could be achieved, he said it could be done with sincerity of heart and with the push from the executive for the legislature to, through laws, restructure the system and strengthen the institutions which drive economic growth.
On the proposal for a new minimum wage of 56,000 Naira by the labour unions, he also suggested that policies should be made to encourage production within Nigeria so that the wage of workers would be enough at all times to purchase goods.
The economist pointed out that if wage was increased, the inflation rate would still remain on the increase since most of the items used in Nigeria were imported.
He stated that with such situation the new wage if paid would not have a direct impact on the nation’s economy.
The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) are proposing 56,000 Naira (about $281) as a new minimum wage to the Nigerian Government.
The unions made the proposal at a press conference held on Wednesday in Abuja, the nation’s capital.
The President of the NLC, Mr Ayuba Wabba, told reporters that the unions made the formal demand on the proposed national minimum wage to the Federal Government on Tuesday.
The current national minimum wage is 18, 000 Naira.
“I can say now authoritatively that as of yesterday (Tuesday) we made a formal proposal to the Federal Government of 56,000 Naira to be the new minimum wage.
“The demand has been submitted officially to the government and we hope that the tripartite system to look at the review will actually be put set up to look at it.
“Our argument is that, yes, it is true that the economy is not doing well, but the law stated that wages for workers must be reviewed after every five years.
“So, the issue must be looked into by the Federal Government and workers should not be seen as sleeping on their rights,” he said.
The NLC President further told the conference that the last review of the national minimum wage was done in 2011 and that the setting up of a tripartite committee to review the newly proposed national minimum wage was long overdue.
He urged the government to set up the committee to the review the minimum wage, with their proposal in mind.
According to him, the representatives of the unions and the government could only fashion out the negotiation process at a roundtable.
He pointed out that the proposed minimum wage would ensure that no worker earned below what could sustain him or her in a month.
“You also know that when we negotiated the 18,000 Naira minimum wage, the value in terms of exchange rate at that time was almost at 110 Naira to the dollar.
“But as at today, the value of the Naira to the dollar has been reduced; and there are the issues of inflation and purchasing power, among others to contend with.
“So, it also about the law of the review of the wage, the law envisaged that within a circle of five years, there must be a review,” Mr Wabba stressed.
The unions demand is coming at a period the scarcity of petrol and other forex related issues have affected economic activities and had pushed inflation up, reducing the value of the Naira.
Nigerian workers are also preparing to mark the next Workers Day on May 1.