While the Accountant-General of the Federation has issued the warrant to ministries and agencies for the payment of the new minimum wage, three months after its bill was signed into law by President Bola Tinubu, only seven states have set up committees to fashion out modalities for its implementation.
This is disturbing as it is the most crucial level of the struggle. The dual policies of fuel subsidy removal and foreign exchange deregulation by this administration, have unleashed an unbearable cost of living crisis on most Nigerians.
The states that have set up committees are Abia, Borno, Jigawa, Kano Kwara, Ogun and Ondo. At the federal level, computed figures after the consequential adjustments were made by a 16-member panel chaired by the Head of the Civil Service of the Federation, Didi Walson-Jack, and approved by the National Salaries, Income and Wages Commission, put the annual salaries of federal workers at N4.019 trillion. This is huge.
Many states had, before now, said they were waiting to see the modus operandi from the centre before kick-starting their processes. This lame-duck strategy is unacceptable. Meanwhile, Gombe State has openly declared that it cannot afford to pay the new wage structure, citing lean resources.
Its governor, Inua Yahaya, said, “I cannot pay the minimum wage, and I suspect many other states are in the same predicament.” Plateau and Kebbi states seem to be clever by half by taking the position that they will “negotiate” with the organised labour, after which their final positions would be made known.
As the Federal Government dithered on the negotiation for over a year, the lukewarm attitude of governors to the whole idea of a salary increase was apparent. Many of them defaulted in the payment of the two preceding minimum wages of N19,000 and N30,000.
Through their platform, the Nigeria Governors Forum, they issued a statement in June warning that even N60,000 as minimum wage was “not sustainable and cannot fly.” If paid at all, they argued that all their monthly disbursements from the Federation Accounts Allocation Committee (FAAC) would be utilised in the payment of salaries, with nothing left for socio-economic development.
The value of the naira has been grossly eroded, thus making the poorly paid worker even poorer. The recent increase in the pump prices of fuel has further fuelled food inflation, alongside the spike in transport fares and other services. The price of a litre of fuel averages at about N900 in Lagos; N922 in Abuja; and, N1,019 in Borno State. Also, a bag of 50 kilogrammes of rice is selling for around N95,000 in some parts of the country.
It is obvious that not all states have equal financial capacity to meet up with the new wage challenges. For instance, while Delta State collected N43.7 billion from FAAC in July, yet despite a quantum increase in the distributable revenue pool, Ogun State received a paltry N6.3 billion in comparison. Some other states are worse off, perhaps due to debt deductions.
This moment of reality, therefore, requires governance fashioned along the template of prudence and accountability. Governors should be resourceful in managing their state treasuries. Unfortunately, most of the governors still live in garish opulence, which is at variance with the challenges their states face. The cost of governance is on the increase, and there are so many revenue leakages that should be blocked immediately.
The culture of fraudulent contracts, weaning the payrolls of ghost workers, and the appointment of too many aides are issues that governors should face squarely. It is bizarre that at a time of economic emergency such as this, many governors still have aides in excess of 1,000 and they travel in convoys of over 20 SUVs. This is insensitive and outright irresponsibility!
Solving the emergent wage burden or workers’ hardship should not take the form of giving workers two days off in a week, as Governor Dapo Abiodun of Ogun State did this September, and which is a path some other governors had earlier trodden. The policy will worsen the low productivity and absenteeism already crippling public service delivery across the country.
Only Lagos and Edo states have been able to keep their heads above water with the N77,000 and N70,000 they have been paying as minimum wage when the issue was put on the front burner by organised labour. The Lagos State Commissioner of Information, Gbenga Omotoso, recently said that the government had no problem with the clamour for the implementation of the new wage, as it was far ahead on it. “Lagos has been paying more than that, and we will continue to pay,” he stated.
With the lethargy of 27 states since 29 July when the new minimum wage came into effect, it seems that it will need more than just persuasion to nudge them into action. A lot of funds could be mopped up from security votes that run into billions of naira, which governors appropriate to themselves without accounting for, and channelled towards paying the new wages.
This is the right thing to do, as Nigerians don’t even feel the security these funds purportedly provide. In fact, that expenditure item is a conduit for the theft of public funds, as affirmed by a few former governors.
We see more headwinds ahead with moves by the Federal Government to remove electricity subsidies. The president discretely hinted at this inevitability when he told former presiding officers of the National Assembly who visited him that Nigerians should be patient, work harder and take to agriculture, as there is “…no free beer parlour anymore.”
The Presidential Fiscal Policy and Tax Reforms Committee headed by Taiwo Oyedele has recommended an increase in Value Added Tax (VAT) from 7.5 per cent to 10 per cent. Inexorably, the prices of goods and services will surge upwards as a result, and the poor, of which Nigerian workers are part of, will bear the brunt most. But the country should not be, as one economic analyst, Emeka Ejikoye put it, a “paradise for a few, (and) hell for the masses.”
States can pull themselves out of their fiscal miasma by being creative and injecting private sector templates or global best practices in their operations. The use of the Integrated Payroll and Personnel Information System (IPPIS) has been a useful technology-based tool in detecting payroll fraud at the centre, which states have copied. This has, nevertheless, not been creditably applied.
In 2016, the Federal Government’s personnel audit, in which IPPIS played a key role, fished out 50,000 ghost workers, for which N200 billion was saved annually. Its earlier adoption when Dr Ngozi Okonjo-Iweala was the Minister of Finance yielded a similar outcome.
Unfortunately, nobody is held to account for such massive levels of fraud, both in the states and at the centre, thus entrenching the evil practice in our bureaucracies nationwide. A syndicate is in charge of the salaries of 59 dead workers in the Anambra State Local Government system that are still on the payroll, while eleven workers who have relocated abroad were continually receiving their salaries also.
In Kaduna State, 24,000 ghost workers were discovered in 2017 and 22,500 in Borno State. Billions of naira are siphoned from the system through such large-scale fraud, which may have been going on for decades. It can’t be business as usual for any state that wants to survive or stay out of trouble.
Consequently, governments at all levels should scrutinise their payrolls, keep a manageable and efficient workforce, prosecute those who tamper with payrolls and sundry treasury looters, and stop taking loan facilities for white elephants, in order to save money and pay the new minimum wage. Any state that acts to the contrary, will certainly court industrial anarchy.
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