President Muhammadu Buhari has confirmed the readiness of the Nigerian government to enter into “negotiations for salary review” for all the workers who are already earning above the proposed minimum wage of N30,000 per month.
However, the President did not explicitly say if this “salary review” would be upwards to spread the coming salary increase across board, or downwards to accommodate it.
On Tuesday, the labour in many states of the federation had protested the delay in the implementation of the proposed minimum wage; and on Wednesday, the President inaugurated the Technical Advisory Committee on the Implementation of an Increase in the Minimum Wage, to be chaired by Bismarck Rewane, a renowned economist.
Speaking at the occasion, the President said: “I want to make it clear that there is no question about whether the National Minimum Wage will be reviewed upwards. I am committed to a review of the Minimum Wage.
“Also, it is important to explain that even though the subject of a National Minimum Wage is in the Exclusive Legislative List, we have been meeting with the state governors because it is imperative that the Federal Government carries the state governments along in determining any upward review of the minimum wage for workers.
“This is especially necessary considering the prevailing public sector revenue challenges, which have made it extremely difficult for some of the governments to pay workers as and when due.
“As you know we, at the federal level, have made adequate provision for the increase in the Minimum Wage in our 2019 Budget proposals which we submitted to the National Assembly. Therefore, we will be able to meet the additional costs that will be incurred in moving up all personnel who are currently earning below the new minimum wage.
“However, we anticipate that after the new minimum wage has been passed into law we will be going into negotiations for salary review for all the workers who are already earning above the new minimum wage. It is therefore important that we are properly prepared to meet these demands.”
Buhari also spoke about the importance of “implementing these consequential wage adjustments in a manner that does not have adverse effects on our national development plans, as laid out in the Economic Recovery and Growth Plan (ERGP), which sets appropriate targets for levels of Capital Expenditure, Public Debt, Inflation, Employment, etc.
“It is absolutely important that the implementation of a new minimum wage does not adversely affect these targets, and thereby erode the envisaged gains for the workers,” he added.
Technical Committee inaugurated on Wednesday will advise the government on how best to fund, in a sustained manner, the additional costs that will arise from the implementation of the consequential increases in salaries and allowances for workers currently earning above the new minimum wage.
The Terms of Reference of the committee are to develop, and advise government on how to successfully bring about a smooth implementation of impending wage increases; to identify new revenue sources, as well as areas of existing expenditure from where some savings could be made in order to fund the wage increases without adversely impacting the nation’s development goals as set out in the Economic Recovery and Growth Plan; to propose a work plan and modalities for the implementation of the salary increase; and make any other suggestions that will assist in the implementation of this, and future wage increases.
Given the urgency of this exercise, the committee is expected to complete its deliberations and submit its report and recommendations within one month.