FG plans a two-pronged approach to address the challenges caused by the removal of fuel subsidy. The first aspect involves providing palliatives to mitigate the effects of subsidy removal, while the second focuses on the proposed minimum wage of N200,000 put forward by labor unions. However, the government’s deviation from the labor negotiation process and the absence of a Labor Minister may create friction between labor and the organized private sector.
The Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have demanded an increase in the minimum wage to N200,000, considering the current N30,000 as insufficient to offset the impact of subsidy removal. The demands also include the introduction of tax holidays for employees earning below N200,000 or $500 monthly, the implementation of a PMS allowance based on income brackets, and the establishment of an intervention fund to address education, health, and housing issues. The exchange rate for retailing PMS is proposed to be kept within a limit of two percent for the next ten years, with corresponding adjustments to the minimum wage if the rate fluctuates beyond this threshold.
While the Federal Government is inclined to pay the N200,000 minimum wage, state governors have expressed their inability to meet the requirement, similar to the situation when the minimum wage was previously increased to N30,000. To address the issue, a technical working group led by Anambra State Governor Charles Soludo has been established to work on the technical details and find a resolution.
At a National Economic Council (NEC) meeting, the Salaries, Incomes and Wages Commission assured that the government could meet the responsibility of paying the proposed minimum wage. They cited savings from subsidy removal and the fluctuation of the value of the naira as potential sources of funds. However, state governors raised concerns about the proposal, questioning its feasibility.
President Bola Ahmed Tinubu is reportedly convinced that labor’s demand is not unrealistic, as it aligns with his campaign promises. The President had previously stated his commitment to providing workers with a living wage for a decent life and to support their families.
The matter was discussed at the NEC meeting, led by Vice President Kashim Shettima, and a sub-committee was formed to review the situation. The sub-committee, consisting of governors and representatives from various sectors, including organized labor, aims to review the technical details and present the findings to NEC for a final decision on the minimum wage.
It is important to note that the proposed N200,000 wage is separate from the statutory minimum wage, and a review of the minimum wage is still scheduled for early next year. Labor unions are seeking a wage award to alleviate the impact of subsidy removal, similar to previous wage awards implemented by the government.
The negotiations and discussions surrounding the minimum wage and palliatives are ongoing, and further developments will shape the outcome of these initiatives.