State of states and minimum wage

Alvan Ewuziw

Last week I opined that the power of elections can hardly be underestimated. In spite of the deep hole it bores in the national pocket to fund the process, and the acrimony that come with the jostling for positions, it would seem that elections do the people more good than harm. This, not for the political jobbers who come alive at such periods and boost their bank balances with proceeds from politicians desiring office. The people also have dividends of elections such as the Nigeria Labour Congress is at the edge of bringing for its members. The news is that President Muhammadu Buhari has acceded to 30,000 naira as the new minimum wage, following the move by NLC to shut down the system if government refuses to move up the wage. NLC president, Ayuba Wabba, told the press that the intended strike had been suspended given that government had acceded to the National Labour Congress The NLC has been tactical in exploiting the power of elections to virtually arm-twist the government into bowing to its request. The minimum wage has been reviewed upwards. The workers struck on the heels of elections, knowing that politicians would be no hard nuts to crack when elections loom. Labour minister, Dr. Chris Ngige and the Federal Government’s Chief Negotiator, Mrs. Amma Pepple, have bowed to labour’s demand. But the battle is half-won because the president Muhammadu Buhari would send a bill to the National Assembly wherein he would seek a modification of the substantive minimum wage.

READ ALSO: New minimum wage: Buhari’ll decide after studying recommendation – FG

The national assembly may not truncate the bill given the groundswell of seething anger in the national work force that Nigeria’s Legislators take fat paychecks, amongst the juiciest in the world of Legislators, in contra distinction with Nigerian workers who rank amongst the least earning in the world.

While labour leader, Ayuba Wabba, did not go to town with any figure, it has become public knowledge that N30,000 is the proposed minimum wage. The workers whose first shot landed at N52,000, were persuaded to leave it at N30,000.

They have agreed, but the snag is the legal implication of the president’s impending bill to the National Assembly. The bill, if it sails through, and the power of elections will make that happen, every employer of labour, is bound by that figure. Employers can only pay higher and nothing lower than the minimum wage. The NLC has indeed fought a battle for all workers, irrespective of their status in terms of workforce. Their staff will have to multi-task in order to keep their jobs.

However, the real snag in the impending minimum wage is the rather “Unified Federalism”, my own terminology, which Nigeria runs. If the president’s bill goes through the assembly, and he accents to it, a process I expect to go with the speed of jet and conclude, before the February 2019 elections, the implication is that all states in the federation are bound by the new wage. The governors have said the new wage will break their backs, that their finances can hardly carry the new wage bill. They complain about reeling under heavy wage bills such that an addition, by way of increment, will make them comatose. They will turn to salary centres, unable to do nothing else, given that they will be cash-trapped.

States in Nigeria were created for political rather than economic reasons. The unitary federalism in operation make all states go to Abuja, to sit around the table, and share money every month. But for a former finance minister Dr. Ngozi Okonjo Iweala, who began the process of publishing what states take every month, the process and proceeds were shrouded in secrecy. Now with the internet making information global, such figures no longer hide from the people. The nagging and glaring question is whether the states can pay the new wage. It is not begging the question because it took the intervention of the federal government and the Paris club refunds for many states to pay their backlog of wages. Some states such as Kogi, Ekiti, Osun and others were not completely bailed out of their debts. Some of them still have backlog of salaries, a clear indication that the new wage is a rather tall order. There seem to be no consideration for the economic viability of these states at the point creation. There were 12 states at the point of creation in 1967, before they moved to 24, then 30 and now 36, all done under military dispensation. No one tended to care a hoot about their sustainability given that petro-dollars were following in freely.

Now the economic reality of those unguarded political moves have downed on the nation. A state ought not to be just a political entity, it ought to also be an economic entity. They cannot sustain themselves perhaps because petro-dollars have made everyone lazy. They patiently wait for every month end for commissioners of finance to converge on Abuja to share money. Today they seem to be nothing to share in the face of burgeoning population and increasing responsibility.

We have come to point of restructuring or collapse. This federation cannot continue on this wobbly leg and expect not to trip and fall. Economic restructuring holds the key to the nation’s survival; one that imbues economic independence on the federating entities and removes every impediment towards exploiting resources within its enclave. The federal government ought to be collecting royalties, for want of a better word, from the states. That way states can determine their pay. They may even pay better that the NLC now contemplates.

Some of the states have also received knots for the profligate lifestyles of their governors and excesses in the aparati of governance. Former governor of Anambra state, Peter Obi, once recalled how he cut down expenditure on petrol for the governor’s’ convoy from N.3 million daily to about N40,000, thus saving huge sums for the state. The NLC says that, in the face of scarce funds, some governors still live like multi-billionaires, insisting that more prudence and frugal living could free some funds for them to pay the new wage. The glaring point is that the financial state of some states cannot sustain the new wage and the reality of economic restructuring now stares the nation in the face

READ ALSO: PDP VP slot: I never nominated Peter Obi – Wike

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