Governors and the minimum wage

THE Nigerian Governors’ Forum (NGF) started courting trouble with the organised Labour last week when they met at the Presidential Villa, Abuja, and announced they can no longer pay the N18,000 national minimum wage. According to them, it was introduced when the price of crude oil was $126 per barrel, arguing that now that it had plunged to about $41 per barrel the states could no longer afford to pay.

In a sharp retort, the two factions of the Nigerian Labour Congress (NLC) led by Comrade Ayuba Wabba and Comrade Joe Ajaero respectively, struck a united chord and warned the governors to “prepare for war” if they went ahead to implement their resolution. Labour even signified its intention to demand for the increment of the minimum wage, thus heightening the sense of an impending Labour showdown.

But Governor Adams Oshiomhole of Edo State, a former president of the NLC, quickly sided with organised Labour, warning his colleagues that democracy “does not run at the convenience and comfort of governors, ministers and presidents”. He reminded them that the national minimum wage was elaborately negotiated before former President Goodluck Jonathan signed it into a national policy.

We can understand the discomfort the federal and state governments are going through in the face of severe economic slump arising from the world oil glut. We, however, believe it is imprudent to consider a downward review of the minimum wage as an option in coping with the economic situation. The minimum wage, which comes to about $3 a day, is already too low for such contemplation. Nigeria’s lowest paid workers already live below the poverty line by universal standards.

It is a sad irony that even with such a poor minimum wage profile, the payment of salaries, perks and overheads of both civil servants and political appointees of government gulps over 70 per cent of the annual budgets of governments at all levels. This leaves very little for capital development and nothing to cater for the needs of people surviving outside government monthly payroll.

The federal and state governments are obligated to pay the minimum wage. We are convinced that with the trimming of excesses in overall cost of governance and boosting of alternative sources of internal revenue, it can be done.

There is no more escaping the need to totally restructure the fiscal regime which the military left behind, whereby the entire nation leaves the management of the national economy in the hands of the Federal Government to spoon-feed the lower tiers.

The time has come for full fiscal federalism. It is only when the federating units are given the powers to harness their resources that the economy can be effectively diversified.