One size fits none
Governors from the southern region, under the aegis of the Southern Governors’ Forum (SGF), have agreed that each state will pay the new…
Governors from the southern region, under the aegis of the Southern Governors’ Forum (SGF), have agreed that each state will pay the new minimum wage according to its ability and advocated that each state in the southern part of Nigeria be allowed to negotiate the new wage with the labour unions. In their 16-point communique, the forum called for strengthening fiscal federalism and devolution of powers. The southern governors corroborated the National Chairman of the Association of Local Governments of Nigeria (ALGON), Aminu Muazu-Maifata, who said that the local governments cannot afford to pay ₦62,000 minimum wage.
The proposal by Southern governors to allow states to set their minimum wages based on their economic conditions is not a new concept. These governors have been practising this approach for a while, tailoring minimum wages to their states’ specific needs and economic realities. For instance, Zamfara State (in June 2024) announced that it has commenced payment of the ₦30,000 minimum wage that was signed into law in 2019. According to the Zamfara governor, some of the state’s civil servants were paid a minimum wage as low as ₦7,000. Some other states that claimed to have implemented the ₦30,000 minimum wage were paying workers percentages as salaries, making it difficult to track what was owed. The existing legal framework provides for a national minimum wage, which all the qualifying employers everywhere in Nigeria must adhere to. Historically, the actual compliance by the states has been abysmal. However, it remains illegal not to pay the minimum wage in Nigeria once it is agreed to. The current minimum wage of ₦30,000 ($19.80) monthly was implemented in 2019 when economic indicators were completely different from present realities. At that time, the official exchange rate and inflation rate were $/₦365 and 12%, respectively, compared to the present day’s $/₦1,509 and 33.9%, respectively. While the haggling was ongoing between organised labour and the FG, Edo State announced that it would implement ₦70,000 monthly. Many expected that the FG’s proposal would at least mirror this rate, especially after an understanding was reached that the proposed rate would be “higher than ₦60,000.” However, the FG proposed ₦62,000, which, shockingly, many state governors and local government chairmen considered too high. The newly granted local government autonomy has added another layer to the conversation since local government chairmen/administrators must decide how much they can afford to pay workers. This makes clear the argument that was made during the labour-vs-government faceoff. This agreement means that the federal government can pay ₦80,000 as a minimum wage while states peg theirs at ₦62,000 and local governments pay ₦35,000. Which of these minimum wage benchmarks would apply to the private sector? What does this arrangement do to the Minimum Wage Act? What about inflation? Market prices will not differentiate federal government employees from local government employees.