“It is in this wage regime that we will now have a proper salary structure for workers across the length and breadth of Nigeria. We expect that the private sector and State Governors will also do the same”
The Federal Government announced on Thursday that a new minimum wage regime will take effect on April 1, 2024.
Idris Mohammed, Minister of Information and National Orientation, said in an interview with The PUNCH in Abuja that the current N30,000 minimum wage would expire at the end of March 2024.
According to an analysis of the 2024 – 2026 Fiscal Framework budgets, the Federal Government will spend N24.66 trillion on salaries in 2024, 2025, and 2026.
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Following President Bola Tinubu’s removal of the fuel subsidy on May 29, 2023, the Federal Government agreed to pay N35,000 to each of its employees to mitigate the effect of the subsidy removal.
However, organised labour insisted that the N35,000 wage award was merely a stopgap measure, adding that the minimum wage should be reviewed in 2024.
After months of negotiations, the Federal Government’s team and the Joint National Public Service Negotiating Council reached an agreement on the implementation of the N30,00 minimum wage on October 18, 2019.
However, labour unions confirmed on Thursday that they had begun negotiations with the federal government, adding that the country’s labour law requires that the minimum wage be reviewed every five years.
According to Joe Ajaero, National President of the Nigeria Labour Congress, ‘it is open knowledge that the review of the national minimum wage is a matter of the law which is expected to happen in 2024.’
Mohammed, the Minister of Information and National Orientation, told The PUNCH that the increased take-home pay was intended to replace the government’s temporary palliative measure put in place to alleviate the hardship caused by the removal of fuel subsidies.
*New wage regime*
The Minister said, “Certainly, there is a new wage regime that will come in on April 1, 2024. That is why these palliatives were targeted so they would cushion economic hardship before then.
“In our negotiation with Labour, we said that the wage issue was not something one could just fix. A committee that will also involve Labour itself will work on it.
“The committee is being constituted, and we are talking to Labour about it. And by the time this current wage regime expires by the end of March, we will expect that a new wage will begin by April.
“It is in this wage regime that we will now have a proper salary structure for workers across the length and breadth of Nigeria. We expect that the private sector and state Governors will also do the same.”
*N24.66tn for salaries*
As organised labour demands a new minimum wage, an analysis of the Fiscal Framework for 2024-2026 reveals that the Federal Government intends to spend 29.18% of its total budgets for 2024, 2025, and 2026 on salaries, overheads, and pensions.
The total budgeted amount for these three items is N24.66tn, or 29.18% of the total budgeted amount for the three years.
Personnel costs, as well as the two others, are expected to rise by 8.51 percent from the amount (N7.36tn) budgeted in 2023 to N7.99tn in 2024, due to anticipated salary increases beginning in 2024 amid worsening economic conditions.
It is then expected to rise 2.41 percent to N8.18 trillion in 2025, and 3.77 percent to N8.49 trillion in 2026. The sum pales in comparison to the N23.37tn (27.65% of total budget) that the government intends to spend on capital expenditure during the review period.
This indicates that the culture of high overheads at the expense of high fiscal deficits will continue. The Federal Government had spent 29.76% (N3.78tn) of its total spending (N12.7tn) on salaries as of September 30, 2023.
The amount spent on salaries is 157.14% greater than the amount spent on capital allocations for the year.
The Government said, “The actual spending was N12.7tn. Of this amount, N5.79tn was for debt service, and N3.78tn for personnel costs, including pensions.
“Only about N1.47tn (25 per cent of the pro-rata budget) has been released for MDAs’ capital expenditure as of September 2023.”