Minimum Wage: Addressing poor implementation by states

Minimum Wage – the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period – remains a sensitive matter.

The purpose of establishing a minimum wage is to protect workers against exploitation, reduce income inequality, alleviate poverty and promote social and economic well-being.

In Nigeria, minimum wage is based on monthly income with an average working period of eight hours daily and five days weekly.

It is expected to be reviewed every five years. The last review was in 2019, from N18, 000 to N30,000.

As Nigerian workers expect a new minimum wage in 2024, President Bola Tinubu has promised that it will take effect from April.

Workers’ expectations on the minimum wage have been high through their two major labour centres, the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC).

Workers cross the country are optimistic that the Tripartite Committee on the National Minimum Wage, which was set up by the Federal Government on Jan. 30 to determine the new minimum wage, will be realistic in determining the new wage amount.

They expect the committee to put into consideration the high inflation rate of 31.7 per cent in February from 29.9 per cent reported by the National Bureau of Statistics in January, among other factors.

The President of the NLC, Mr Joe Ajaero, had stated that if the inflation would continue, organised labour might push for a new minimum wage of up to one million Naira for Nigerian workers.

Proposals by TUC and NLC at recent public hearings in the six geopolitical zones and Abuja, indicate that the organised labour may slash the demand from one million Naira but still expects the wage to be able to absorb financial pressures faced by the Nigerian worker today.

During the zonal public hearings in Lagos, Kano, Enugu, Akwa Ibom, Adamawa and Abuja, workers in the North-West requested for N485,000, North-East, N560,000; North-Central, N709,000 (NLC), and N447,000 (TUC); South-West, N794,000; South-South, N850,000; and South-East, N540,000 by NLC and N447,000 by TUC.

According to the Chairman of the Enugu State Chapter of the NLC, Mr Fabian Nwigbo, the value of N30,000 minimum wage approved in 2019 had been battered by inflation and worsening economic hardship.

Nwigbo argues that Nigerian workers remain the least paid in the entire West Africa.

“We are asking our leaders to consider the plight of Nigerians. It should be N540,000 per month,” he recommends.

The Secretary of the Nigeria Labour Congress, Mr Chris Onyeka, regrets that many workers can no longer afford their rents or pay their children’s school fees.

He is also worried that with increase in the cost of transport by almost 300 per cent, many civil servants are trekking to work.

Onyeka says every worker wants to earn a favourable income.

‘’We expect that the minimum wage will take care of the basic needs of the average Nigerian family.

“How much will that be? A loaf of bread that used to cost N600 is now almost N2,000.

‘’For a family of six, will a loaf of bread be enough for them in a whole day? Will they not also, at least, take water to eat that bread?

‘’An average family will not spend anything less than N15,000 everyday to take care of themselves; we are talking about a salary that will meet those needs,” he emphasises.

The Lagos State Chairman of Radio, Television, Theatre and Arts Workers’ Union of Nigeria, Mr Ismail Adejumo, is looking forward to a holistic review of the minimum wage.

Adejumo, who is also the Public Relations Officer, NLC, Lagos State Chapter, says: “There are parameters to be considered, and expectations from the workforce in terms of productivity too can be measured side-by-side with what government will do in terms of fixing minimum wage.

“As for the parameters, the cost of commodities is a key factor, and the issue of transportation is a key factor.

“We should also be looking at the issue of housing, we have shortage of housing in Lagos vis-a-vis the population; it is really affecting most working class.”

While expectations on the new minimum wage remain high, analysts argue that the challenge about minimum wage in Nigeria is not approval but implementation especially by state governments and some private employers.

They argue that since inception, minimum wage in Nigeria has suffered non-compliance by some state governments and private employers due to inability to pay and reluctance to pay.

Thus, they believe that ability to pay is very crucial when considering review of minimum wage.

At the recent public hearing organised by the Tripartite Committee on National Minimum Wage across the six geo-political zones of the country, Osun State Gov. Ademola Adeleke, who represented the governors in the South-West Zone, said that states lacked equal ability to pay.

‘’While it will be desirable to see that a uniform minimum wage is agreed to on a national basis, it will amount to self-deceit to assume that states have equal ability to pay.

‘’To this effect, I will humbly advise that individual states will have to negotiate with their workers and agree to a realistic and sustainable minimum wage in line with available resources, ‘’ Adeleke said.

However, the Assistant General Secretary of NLC, Onyeka, argues that state governments are not complying because there are no consequences for their non-complaince.

‘`If there were, I believe, many will be complying.

‘’The Federal Ministry of Labour and Employment, which is empowered by law to check abuses and violations of the extant law, does not have the capacity to monitor or enforce.

‘’When we look at the mechanism put in place by the Act to check non-compliance, reporting and enforcement, is the mechanism effective? It has to be strengthened, so that it will become effective,” he argues.

Prof. Kemi Okuwa, a Research Professor at the Nigerian Institute of Social and Economic Research, notes that Nigeria is number 44 in minimum wage cadre in Africa.

Okuwa made a presentation at the recent South-West Zonal public hearing, which took place in Lagos

According to her, the current N30,000 minimum wage is equivalent to $20 per month.

For the Director-General, Nigeria Employers’ Consultative Association, Mr Adewale-Smatt Oyerinde, there must be critical review of the current minimum wage by all stakeholders.

Oyerinde also urges appropriate recommendations, approval and implementation.

Meanwhile, the Nigeria Governors’ Forum (NGF) wants the tripartite committee to take into account the present circumstances, unique characteristics of individual states, and their effects on the abilities of both governments and private sector employers to pay, when determining the new wage amount.

In a communiqué issued after its virtual meeting, and signed by its Chairman and Kwara Gov. AbdulRahman AbdulRasaq, and made available to journalists on Thursday, the NGF said: “Members reviewed the progress of the National Minimum Wage Committee and ongoing multi-stakeholder engagements towards agreeing on a fair minimum wage.

“Members urged the National Minimum Wage Committee to consider the current realities, individual states’ peculiarities, and consequential impact on the capacity of government as well as private sector employers to pay.

“Members also emphasized the need for proposals to be data-driven and evidence-based.”

Analysts urge the 37-member tripartite committee, comprising government representatives, the organised labour, and employers association, to ensure that the new minimum wage reflects the evolving economic landscape.

They advise that the minimum wage should meet the needs of the Nigerian worker, urging also that it should be implementable and sustainable.