Minimum wage: Crisis brews in states over chapters’ demand for jumbo pay

Many of the 36 states are in a quandary on how to cope with payment of the new minimum wage according to reports from some of the states. Negotiation is already intensifying between the federal government and labour over the new minimum wage with investigation showing that six states....READ FULL ARTICLE

Abia, Anambra, Bayelsa, Kebbi, Nasarawa and Zamfara- are yet to implement the current minimum wage of N30,000,almost six years after its introduction.

Four other states –Ebonyi, Benue, Kogi and Osun – are only paying the minimum wage to workers on levels one to six and in the case of Osun, beneficiaries are those from level 7 and below.

Many of the states have also not done well in the payment of wage award to workers to cushion the effect of the current rise in the cost of living, according to a report prepared for the Nigeria Labour Congress (NLC).

In the NLC report sighted byThe Nationstates confirmed as paying the current minimum wage are: Adamawa, Akwa Ibom, Bauchi, Borno, Delta, Edo, Ekiti, Enugu, Gombe, Jigawa, Kaduna, Kano, Katsina, Kwara, Lagos, Niger, Ogun, Ondo, Oyo, Plateau, Rivers, Taraba and Yobe.

The excuse often given by the states that have not been paying the minimum wage is paucity of funds.

Although the monthly allocations to the three tiers of government have increased substantially in the aftermath of the fuel subsidy withdrawal, the defaulting states are still foot dragging on effecting payment of the minimum wage.

The situation appears even worse in respect of payment of wage award by the states. Only Ondo and Lagos states are recorded as having paid anything close to the N30,000 per month for a half year as initiated by the federal government.

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Ondo paid N35,000 and Lagos N31,000. Some other states pay amounts ranging between N10,000 and N25,000 while some have not even paid anything yet.

States yet to pay the wage award are: Abia, Akwa Ibom, Bayelsa, Benue, Borno, Edo, Kaduna, Kebbi, Kogi, Nasarawa, Rivers, Taraba and Zamfara.

Akwa Ibom is said to have paid palliative allowance for Christmas only while Anambra paid only N12,000 and Niger State N20,000 also in December.

Delta paid N10,000 for September, October and November.

Reports from the states said the governors were not amused by the high figures demanded by labour activists during the recent zonal public hearing on the minimum wage organized by the 37-member committee set up on the issue by the federal government.

The figures range between N447,000 and N850,000 per month.

The committee which is headed by a former Head of Civil Service of the Federation, Bukar Aji, has six governors among its members: Mohammed Bago (Niger State, representing the North Central); Bala Mohammed (Bauchi State, representing the North-East); Dikko Radda ( Katsina State, representing the North-West);Charles Soludo (Anambra State, representing the South-East); Ademola Adeleke (Osun State, representing the South-West); and Otu Bassey (Cross River State, representing the South-South).

Also on the panel are Minister of State for Labour and Employment, Nkeiruka Onyejeocha; Minister of Finance and Coordinating Minister of the Economy, Wale Edun; Minister of Budget Economic Planning, Atiku Bagudu, and the Head of the Civil Service of the Federation, Dr. Yemi Esan.

The governors, who said unrealistic demands from Labour would not do anyone any good, urged the Minimum Wage Committee to consider the capacity of the states to pay the new minimum wage. The committee is scheduled to meet again later this week.

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Experts: How governors can cope with new minimum wage

A former Director-General at the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, believes that the states can pay a reasonable minimum wage if they have the right policies in place.

“Well, the point is that the states are getting more revenue now and so, their capacity to pay has increased,” he told The Nation by phone yesterday.

He added: “There is no doubt about that. But the major thing I think they can do to meet up with the minimum wage obligation is to take a cue from what the federal government is doing.

“Many of them (states) have over-bloated workforce, whether at the state or local government levels. Some of them do not need more than half or two thirds of the current workforce that they are carrying.

“There are so many idle hands in the state bureaucracies. There are too many political appointments and too many people on their payrolls. So, they have to also prune down that.

“Because if you must engage people, you must give them a wage that makes sense. You don’t just engage people for the sake of engaging them. What is worth doing at all is worth doing well. “So, let them just retain the size of the workforce that they can give a wage that is a bit reasonable, especially given the realities of inflation that all of us are facing now. I think those are the things I think they should do first and foremost.

“Then of course, they should also be more creative in getting more revenue internally. Many of them are too dependent on the federal allocation. So, they need to be a lot more creative.”

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On whether the state governments need to consider raising taxes in order to jack up their revenue base, Yusuf spurned the idea, but would rather they get more ingenious with the tax administration.

“Asking the states to boost their revenue profile is not about raising taxes at all. It’s about efficiency in tax administration. In many of the states, their tax administration system is so very loose.

People are doing business in those places and it is their responsibility to pay tax. We are not talking about increasing the taxes regime. We are talking about efficiency, we are talking about using technology to ensure that the citizens’ taxes, especially the corporate citizens also live up to their statutory obligations to the government.“

According to him, “Some people are doing businesses across the states and some of those businesses are doing well and some of them are not paying any taxes at all. If you go to some of those states, you have some big properties that people have built there; it’s not poor people that built them there. In many of those places, many of them are not paying any form of taxes. So, the point to make is about efficiency in tax administration.”

Pascal Efe, a public affairs analyst, shares the same sentiments with Yusuf. “I agree that a new minimum wage is indeed inevitable given the current state of affairs.

What the state governors can do is to ensure proper management of their resources by cutting down on many wasteful expenditures. That way they can pay the minimum wage and still be able to carry our critical infrastructure in their respective states.”...READ FULL ARTICLE

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