THE NATIONAL MINIMUM WAGE AND SUNDRY ISSUES: My Humble Position – Onyeukwu

The committee to determine the new National Minimum Wage inaugurated by the Presidency has been sitting to achieve the purpose of its existence.

 It has held public hearing in the six geopolitical zones where various interest groups suggested amounts that will ameliorate the poor living conditions of workers. The minimum from all the suggestions is about (N400,000.00) Four Hundred Thousand Naira per month. In suggesting these figures none of the stakeholders has come out to give us a template of the productivity of the Nigerian worker.

The Federal, State and local governments do not employ more than 30% of workers. The question now is – “What is the level of productivity of the Nigerian Workers working for the 3 tiers of government that will persuade the government to increase the minimum wage from (N30,000) Thirty Thousand Naira monthly to over (N400,000)Four Hundred Thousand Naira monthly? How many state governors have been able to pay the previous minimum wage of N30,000 to their state workers? What does the worker need? Is it the quantity of money that cannot buy anything or the enhancement of the purchasing power of their earnings? Does a worker need N400,000 that cannot buy anything? What will be the impact of a Jumbo increment on workers’ salaries on Micro, Small and Medium Enterprises noted to be the engine room of economic development of any nation? How will government minimum wage impact on MSME in the country?

Fundamentally, given the fact that many of the states are yet to implement the expired minimum wage of N30,000 per month for workers, the question then is, how can the states cope since it appears the Federal is negotiating for both itself and the states and local governments? How can local governments that have been financially suffocated and emasculated by the states pay a new and higher minimum wage? Even when it is expected that the revenue sharing formula will be reviewed, yet many of the states and local governments will not be able to cope with any outrageous award. Instructively despite the profligacy of many of the governors, we are aware that every kobo the local or state government earns has competing demands ranging from infrastructure, Education, Health, Security, Welfare of citizens, Agriculture and workers’ wages and salaries among others. Granted that many of the governors are kleptomaniacs, and some are kakistocrats, yet every kobo a state earns must not be used to pay salaries. Government workers are privileged and must know that majority of the citizens who do not have the opportunity to work for the government are equal stakeholders in the states and local governments. They must moderate their expectations.

The higher the minimum wage, not based on any measurable productivity, the more the inflation, the more the currency loose value, the more small and medium scale enterprises collapse, and the worse for the economy and for all of us.

The committee on the review of the minimum wage must look at the issue holistically and the survival of Nigeria must be uppermost in its mind. There is no reason setting a minimum wage of N(100,000.00) One hundred thousand Naira on the basis of current rate of inflation, exchange rate, cost of living when we are aware that more than 75% of the states will not be able to pay. I am not against the workers demand. The question is where do we strike a sustainable balance between the demand for the workers, their productivity, the survival of the Micro Small and Medium Enterprises and the larger Nigerian Economy. Realistically the new National Minimum Wage must not be more than double the existing one otherwise the negative impact will be devastating to both government workers, all Nigerians and the economy.

A critical scrutiny of the policies of the past few months indicate that it is yet morning for the escalating dollar to Naira exchange rate. Consequently the government policies must address how to encourage establishment and productivity of the Micro Small and Medium Enterprises. Boost supply of the dollars, reduce import dependency, encourage exports.

Dependence on classical economic theories will not help this country. The government must explore the possibility to guarantee politicians present and past and top bank executive present and past who have starched looted monies abroad to repatriate same and invest in the economy. Guarantee them of the safety of such repatriation and their freedom.

The official refineries in Port Harcourt, Warri and Kaduna have not worked for more than twenty four years. The government has been maintaining some workforce in these establishments, paying monthly salaries. The amounts the various governments have spent on their turn around maintenance can build two new refineries. Ironically on a daily basis the military and other security forces keep on destroying what they call illegal refineries. Government must think outside the box, encourage the so called illegal refineries in the Niger Delta to form co-operatives to enable government support them to upgrade their refining capabilities and bring them into the tax net.

It’s no more news that nobody in Nigeria knows what quantity of crude oil leaves our shores daily. It’s no news that nobody knows how much we earn from sale of crude oil daily.

Government must intensify efforts in this direction and stop all these leakages.

Import dependency and inability to guarantee the supply of the dollar which is the currency of import is responsible for the volatility of the exchange rates.

These suggestions among others will in the medium term help stabilize our currency.

For now any adhoc measures will backfire in the medium term.

Let the policy advisers stop depending on textbook theories.

Any theory that will work here must take into consideration the unique NIGERIAN ENVIRONMENT.

Fellow Nigerians, the concern of every patriotic Nigerian is for Nigeria to work. It is for us to wake and sleep with electricity, for our children to be employed, our Small and Medium industries to be productive within an encouraging business environment, our excess products to be exported; it is for our roads to be motorable, our airports to be safe and not empty. Nigerians are sacrificing for the recovery, growth and development of the country. The ruling class must live by example. Reduce the cost of governance and their flamboyant Life Style. Unless we create an environment locally conducive for business to flourish, No amount of diplomatic trips by the president will attract foreign investments/investors to an environment considered unsafe and corrupt. The Albatross of insecurity must be tackled headlong.

*Sir Temple Ogueri Onyeukwu