Locking horns
The National Union of Electricity Employees (NUEE) has announced that the national grid has been restored after the organised Labour…
The National Union of Electricity Employees (NUEE) has announced that the national grid has been restored after the organised Labour suspended its strike. The strike began on Monday over the proposed minimum wage increase and the reversal of the Band A electricity tariff. President Bola Tinubu has instructed the Finance Minister to determine the cost implications of the new minimum wage within two days. A tentative agreement on a new national minimum wage has been reached, with the government willing to offer more than ₦60,000 ($40.27, 6/6/2024), surpassing its initial proposal. Further negotiations will continue for the next week to reach a final agreement.
In January 2024, the federal government, deploying considerable funds, established a committee to review the National Minimum Wage. Unfortunately, until the unions called and executed the strike, there was little urgency to reach a workable agreement. Both parties chose to maintain extreme positions, with untenable figures given the current fiscal realities (on labour’s part) and the cost of living (on the government’s part). There is much to unpack about the minimum wage. It is important to note that the law mandates all businesses employing more than 25 people to pay the minimum wage. The unions have entered a standoff with the government while neglecting that the federal government employs less than three percent of Nigeria’s employed population. In fact, 15 state governments have not implemented the ₦30,000 minimum wage passed into law in 2019, and some others who have implemented it have chosen to pay only percentages of salaries to workers. Union leaders must be honest with themselves: Do they want workers to actually receive their full paychecks or only percentages of their salaries while waiting endlessly for their arrears to arrive? Truthfully, the federal government’s proposal of ₦60,000 as a minimum wage appears low and should rightly be increased, but the insistence on returning Band A electricity tariff to ₦65/kWh is unrealistic and could doom the struggling electricity sector. It is now clear that the decades-old practice of subsidising every aspect of life in Nigeria has crippled the country’s economy, and the withdrawal symptoms are too hard to bear. Theoretically, removing the various subsidies may be the right decision for the economy, but wages and the cost of services should increase to balance the impact. Unfortunately, in typical Nigerian government fashion, only extreme behaviour elicits a serious reaction. The unions resorted to brinkmanship with the strike, including shutting down the electricity grid — an act we fundamentally disagree with, and suddenly, the government is moving with urgency. The grid is critical national infrastructure, and unions should not be able to shut it down. Between March 2016 and June 2024, Nigeria’s electricity facilities have been shut down by protesters or striking workers at least four times. On each occasion, the government said it would not condone the act of economic sabotage but did nothing. There was no punishment to discourage such incidents from recurring, nor were laws reviewed to criminalise the practice. Essentially, it is safe to say that Nigerian citizens, businesses owned by Nigerians and foreigners, and investors in the power sector can expect service disruption, significant losses, and total darkness because a group is trying to send a message. In the past, government buildings were barricaded, then airports were targeted, and now it’s the national grid. We need a system that sees an annual — or biennial — review of the minimum wage in tandem with increases in the cost of living.