Amid impending gloom, demand for wage increase rises

With galloping inflation, projected increment in tax payable by individuals and corporates, amid other biting economic policies, analysts, especially labour leaders, have said that a gloomy fortune awaits Nigerians this year.

Indeed, some analysts, while projecting into the year, also predicted that the outlook for a stronger naira against the dollar in 2023 is bleak.

They noted that the devaluation speculation for the naira is fueled by rising inflation, lack of foreign currency reserves and the small difference between oil prices and the budget benchmark price, which could increase pressure on the naira progressively.

The World Bank’s senior economist for Nigeria, Alex Sienaert, projects that debt service will take up 123.4 per cent of Nigeria’s revenue in 2023, adding that the expanding debt service-to-revenue ratio and the amount of Nigeria’s public debt, which will put more pressure on the local currency by 2023, are both causes for concern.

To mitigate the likelya harsh effects, they canvassed salary review and renegotiation of wages across board in order to sustain the aggregate demands coming from workers and to strengthen their purchasing power at times like this.

The immediate past General Secretary of the Nigeria Labour Congress (NLC), Dr Peter Ozo-Eson, a professor of economics, noted that the worsening inflationary trend, which is also happening globally, is sufficient reason for the Nigerian government to increase wages to boost the purchasing power of workers and to stimulate the economy.

“What does inflation do to the wage of workers? Inflation depletes the real wage. Therefore, salaries needed to be reviewed in order to sustain the aggregate demands coming from workers and strengthen their purchasing powers. We are talking about inflation that is above 20 per cent in Nigeria. What does the government expect workers to do? To live in abject poverty where they cannot meet their basic needs? Of course, there is a logic in the demand for a renegotiation of wages,” he stated.

The Executive Secretary of the Organisation of Trade Union of West Africa (OTUWA), John Odah described inflation in Nigeria as ‘extraordinary’ within the West African sub-region.

He said: “We have a situation where within a short period of eight to nine months, the naira has lost more than half of its value. The exchange rate was below N400 around April and May. Now it is going for over N750 to one dollar. This is not happening in other countries within the sub-region.

“So, the Nigerian situation is one of the worst within the subregion. Since the law provides a revision of the minimum wage every five years, it will not be out of place for the labour movement to initiate a review now. The unions should be in the process of submitting a request for the review of the minimum wage to the Federal Government especially in the light of the reigning economic realities.”

While the salary structure in Nigeria may not be one of the worst, Odah noted that the Nigerian wages cannot be rated as one of the best in the West African sub-region.

In the past when agitations were made for wage increase, there were arguments that some state governments may not have the wherewithal to subscribe to a new wage regime. The position is further strengthened by the fact that some state governments have to complied with the current N30, 000 minimum wage structure.

But Ozo-Eson maintained that the question that ought to be asked is not whether the state governments can pay the present or a new minimum wage. For him, if state governments are willing to implement the wage law, they would.

He added: “Many state governors have just refused to pay the N30,000 slave wage, not that they cannot pay. Given the resources of every state in this country, none can claim not to have the resources to pay N30,000 minimum wage. A state or local council that is properly managed should not have a challenge paying N30,000.

“The state governors are able to find enough money to lavish on frivolous trips and other unnecessary expenses. Nigerians need to start asking relevant questions. We often complain about inadequate revenue but are some people not carting our resources away every time? The evidence is coming out clearly now, although we have been pointing to it for a long that there are people that are well placed in government that are helping themselves with our commonwealth. They often speak about a fall in the number of crude oil barrels that Nigeria produces, but I have been saying that there is no fall in production. There is a fall in accounting for production. People are selling Nigeria’s crude and pocketing the money. So, we need to return to the basics and find out where the problem is. It is certainly not with the workers’ salaries.”

He insisted that a call for a new minimum wage at this time is not selfish or misplaced, especially in view of the five-year lifespan of the current N30,000 coming to an end this year.

Again, Ozo-Eson argued: “Of course, a call for higher wages is good given the erosion of the value of the N30,000, which in terms of purchasing value is virtually nothing. The question we should be asking is: should we continue with slave labour? Because that is what N30,000 is currently. If workers are paid what is not enough to regenerate expended energy doing their work, then that is slave labour. Not that slaves were not paid. They were given food to regenerate expended energy but not beyond that, in order not to give them control over their lives. That was what made them slaves.

“If there is a minimum wage that is unable to replenish expended energy while working, then we are back to slavery. No doubt that N30,000 does not feed anyone for a month not to talk of transporting such an individual to and back from work. How does a family man provide for his family with N30,000? These are the issues we must consider if we are living in a humane nation. If we are in a humane society, we must configure how we can have a minimum wage that is a living wage.”

IT would be recalled that the Minister of Labour and Employment, Dr Chris Ngige had recently raised the hope of Nigerian workers of possible salary increment during an interaction with State House Correspondents.

However, a few days later, Ngige claimed that the press misquoted him saying, “the increase talked about was the remunerations and emoluments of the affected workers, especially civil servants. In labour parlance, concerning payment for compensation for work done, remuneration or emoluments is made up of salary component and earned allowance component.”

The minister’s recant has since stirred misgivings within the organised labour movement, which claimed insincerity on the part of the government.

In his reaction, Ozo-Eson said he was not taken aback that Dr Ngige recanted. He explained that the ‘news’ made sense only to the uninitiated Nigerians who are oblivious to the processes that go into salary review, saying salaries are not decreed into existence but are negotiated by the tripartite bodies that comprise government, employer bodies and the workers as represented by their unions.

Ozo-Eson accused government officials of speaking from both sides of the mouth, pretending to be concerned when they have failed woefully in terms of governance.

Another major economic policy of government that would take effect later in the year is the petrol subsidy removal. Precisely on June 1, 2023, the subsidy on PMS will automatically be removed as reiterated by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed during the 2023 budget framework presentation in Abuja.

Her words: “Petrol subsidy will remain up to mid-2023 based on the 18-month extension announced in early 2022. In this regard, only N3.36 trillion has been provided for PMS subsidy.”

As a result, not a few commentators have also said that the decision may throw Nigeria into a battlefield of national protests and rallies against the removal of subsidy.

Reacting, Odah said that the incoming members of the National Administrative Council (NAC) of the Nigerian Labour Congress (NLC) would have their job well cut out in terms of the ability to resist a new Premium Motor Spirit (PMS) regime that will further impoverish the working class.

“The point to note, however, is that the leading candidates in the next month’s general elections have reiterated their desire to remove the subsidy on PMS. If this happens, the new leadership of the Nigeria Labour Congress (NLC) will have to prepare to lead national response from day one it is sworn into office,” he said.

In his analysis, the Chief Executive Officer (CEO) of Dairy Hills Limited, Kelvin Emmanuel admitted that the value of the Naira as it relates to the purchasing power of Nigerians has been hugely depleted.

Emmanuel explained: “In 2014, N30,000 was $200. Today the same N30,000 is $40. If you are looking to understand the correlation between the salaries and exchange rate, please understand that the 495 per cent drop in the value of the naira has impacted terribly on the purchasing power parity of the people, and has, over the course of the last eight years, reduced the per capita income of Nigerians from $3099 to $2100.”

He held that while it is expedient to raise the minimum wage in a very difficult fiscal environment, it is more expedient for the government to make the painful decisions it needs to re-align fiscal and monetary policy for stabilising the exchange, interest and inflation rates.

He also sounded a note of warning on the economic implications of higher wages in view of the current economic realities.

He expressed worries that “considering that the non-debt recurrent expenditure is 37 per cent of the 2023 budget and that the debt servicing is 21.9 per cent of the budget, it is difficult to understand how the Federal Government, states and local councils intend to review upwards the minimum wage in line with minimum wage Act of 2019 which prescribes a five-year review.”

He added that it is equally important to look at the employee casualization bill that was launched in 2021 by a member of the House of Representatives, Ayo Akinyelure, again.

“It sought to checkmate the loophole of entities that are exempt from sections 3(1) of the minimum wage Act of 2019. That is important for protecting the low hanging fruit of workers not protected by the Act. But it is unfortunately stalled in the National Assembly,” he said.

(Guardian)