President Muhammadu Buhari recently signed into law the new minimum wage of N30,000. By this, the Federal and state governments are mandated to pay the new wage. But controversy has continued to trail the development, with some state governments saying it will be difficult for them to pay.
The argument in some quarters is that the possibility of seeing many more defaulting states is high, considering the fact that many states have continued to owe backlog of unpaid salaries of civil servants even at N18,000 minimum wage.
The Nigeria Labour Congress (NLC) has vowed to ensure the implementation of the new national minimum wage.
Beyond the issue of the capacity of the state government to implement the new wage structure, there have also been questions on how the new minimum wage will impact Nigerians who are not in the public and formal economic sectors.
BDSUNDAY asked some government workers what they think about the new minimum wage, and the possibility of its sustainability.
Mrs Mojiola Moses
Talking about the implementation, its lies in the hand of the state government because some state government are still battling with the payment of N18000 claiming that the allocation given to them is not enough and they do not have any supporting revenue to back the state up. Except if the Federal Government increases each state’s allocation, and grant also given to those states that are having challenges that is when I will say the implementation will take effect. There might be little change in the state salaries which might not be N30,000 and it might not be immediate.
But talking about a state like Lagos where there are other sources of revenues apart from the Federal Government allocation, I will say the implementation might be immediate because they have all the necessary available resources to pay it. Also, I could remember during election campaign, the governor-elect and the present governor promised that they are ready for the payment of the N30,000 only waiting for the Federal Government’s approval.
So, on the part of the Lagos state, I will say yes it will be implemented immediately and sustained for as long as it lasts, but on the part of other states that do not have supporting means of resources, I will say it might not happen immediately but gradually.
Dr. Fassy Yusuf
There are many issues involved. Number one, in a Federal system, it is absurd to legislate the same minimum wage for states like Lagos, Rivers, Delta and Akwa Ibom vis-à-vis states like Zamfara, Gombe, Adamawa, Borno, Sokoto and Kebbi. The economic and social status of these states varies. Besides, it negates the principle of fiscal federalism.
Number two, sustainability of implementation is variable dependent including affordability, curbing of wastages, economic and financial engineering, financial discipline, taming corruption, and prioritisation of operations/activities.
Thirdly and lastly, an enabling environment must be created for the private sector to thrive and to stimulate economic growth. We must afford policy somersault and inconsistencies.
Nwanchukwu Charles
It will amount to gross misconception for anyone to say that the implementation of the minimum wage will cause more harm than good to Nigeria economic growth or progress of the country. Nigeria is blessed with all it takes to finance this minimum wage and also ensure that they keep to it till infinity. For me, I see this implementation as a way of giving the country good image because this will go a long way in aiding the citizens to meet up with their standard of living in one way or the other.
I sincerely applaud the president for ensuring that this implementation is a thing of reality. This will also encourage civil servants to put in their best in their respective are of work.
Abasiama Emmanuel Udoeden
It’s painful that the so-called giant of Africa is implanting a minimum wage of mere N30, 000. For a country that has a population of close to 200 million people and recently ranked the world’s capital of poverty, it’s a big shame on the part of our leaders.
The newly implemented minimum wage is nothing short of a sham and a colossal embarrassment. Looking at other African countries such as Rwanda and South Africa that sometime last year increased its minimum wage to about N200,000 if converted to naira, shows that Nigeria needs a total revamp and proper restructuring.
Oriaku Jennifer Chinecherem
When you juxtapose the value of the naira against the dollar before and now, you would see how pathetic the situation is. Naira value has gone down badly but what did they say about half bread? On the growth of the country, I don’t know about that; but I think the false financial security it would give the workers would help them gain more peace of mind from the home-front (their families), that is, if the buying power of their wage doesn’t continue diminishing.
Damilare Asimiyu
Well, the new minimum wage bill has only just been signed into law; we await the implementation across the various states.
Having said that, implementing the new minimum wage is a good omen for the country as it will help improve consumers’ purchasing power. This in turn will suppose increased aggregate demand and strong economic growth at large.
Nonetheless, the downside risk factors include the inability of many states to be able to fund the increased wage bill without incurring more debt or laying off workers. Also, the implementation of the minimum wage will mildly elevate inflationary pressure in the near term. Overall, it’s a good development, provided it is not being accompanied by spike in electricity tariff and petroleum price.
Sobechukwu Eze
To answer the question if the new minimum wage is sustainable, we must look at the real value of the N30, 000. The minimum wage was increased from N18,000 representing a nominal increase of about 66.7 percent. But the real question is, what is the purchasing power of N30, 000 today?
If we calculate the real minimum wage today adjusting for inflation in March 2017 and March 2019, you’ll discover that N30,000 today is only worth N23, 792 in 2017 prices.
This informs us that real income has not raised enough to cater for inflationary pressures. So, as it stands, the minimum wage is not sustainable.
Eniogeru Felix Efosa
The new minimum wage is not really a stepping stone for growth. This is because a lot of other pressing factors contribute to the growth of a country, and not necessarily minimum wage of a negligible percentage of the country’s population. Even amongst these same beneficiaries of the minimum wage, there isn’t even a respite in place to indicate that Eldorado has birthed for them through this act. This is due to the fact that the ripple effect of such small increment in wages for workers is often on the adverse side.
In a short while, the prices of other items are going to shoot up, such as house rent, transportation, children’s school fees, etc, couple with the anticipated upward review of taxes/levies on such wages by government. Until the government puts in place a lot of variables to ensure that there’s an appreciable hike in the purchasing power of the minimum wage recipients, in the foreseeable future, we might just see the lamentation of workers in no distant time. And, don’t forget…Minimum Wage in Nigeria – 2010: N18, 000 = $122; 2019: N30, 000 = $82. So, any headway yet? Capital NO!
Jonathan Aderoju
