The Federal Government may incur additional N315bn in wage bill in the next six months for the newly introduced allowance for federal workers.
This came as Organised Labour agreed to suspend its proposed nationwide strike for 30 days, following the signing of a Memorandum of Understanding with the Federal Government after a marathon meeting that ended around 11pm on Tuesday.
The resolution followed over five hours of deliberations between the Federal Government and Labour at the Chief of Staff Conference Room of the Presidential Villa, Abuja.
Announcing the outcome of the meeting to State House correspondents, the Minister of Labour and Employment, Simon Lalong, said “The NLC and TUC accept to suspend for 30 days the planned Indefinite Nationwide strike scheduled to begin, Tuesday, the 3rd of October, 2023.”
Lalong said the memorandum shall be filed with the relevant court of competent jurisdiction within one week as consent judgment by the Federal Government.
However, the NLC President, Joe Ajaero, said the unions would revisit the agreement if the FG failed to fulfil their demands.
According to the agreement, the Federal Government grants a wage award of N35,000 only to all Federal Government workers “beginning from the month of September pending when a new national minimum wage is expected to have been signed into law.”
The agreement further read in part, “A minimum wage committee shall be inaugurated within one month from the date of this agreement.
“Federal Government accepts to vote N100 billion for the provision of high capacity CNG buses for mass transit in Nigeria. Provisions are also being made for initial 55,000 CNG conversion kits to kick start an auto gas conversion programme, whilst work is ongoing on state-of-the-art CNG stations nationwide. The rollout aims to commence by November with pilots across 10 campuses nationwide.
“The Federal Government should urge state government through the National Economic Council and Governors Forum to implement wage award for their workers. Similar consideration should also be given to local government and private sector workers. A joint visitation will be made to the refineries to ascertain their rehabilitation status.”
Meanwhile, the Federal Government had on Sunday said that the provisional wage increase announced by President Bola Tinubu for all low-income workers for six months would cut across all treasury-paid workers.
The Chief of Staff to the President, Femi Gbajabiamila, revealed this to State House correspondents at the end of a four-hour marathon emergency meeting with the leaders of Organised Labour.
The compromise was reached to avert the proposed indefinite nationwide strike declared by the organised labour.
The meeting came hours after the President in his Independence Day broadcast announced the approval of a N25,000 provisional wage increase for a certain category of federal workers for the next six months.
However, labour leaders rejected Tinubu’s N25,000 provisional wage increment for low-grade workers.
As a result, the Federal Government raised the wage award to N35,000.
“The Federal Government has announced N35,000 only as provisional wage award for all treasury-paid Federal Government workers for six months following further consultation with President Bola Tinubu,” according to a statement by the Minister of Information and National Orientation, Mallam Mohammed Idris.
Earlier in August this year, the Director-General of the Budget Office of the Federation, Ben Akabueze, said the Federal Government’s personnel cost was over N5tn, with 1.5 million workers under the Federal Government’s payroll.
He disclosed this to an Ad-Hoc committee of the House of Representatives, seeking to investigate the mismanagement of personnel recruitment, employment racketeering and gross mismanagement of the Integrated Payroll and Personnel Information System.
Akabueze said, “Not only have we not redrawn, we have significantly reduced our numbers and managed the cost of the government, which as of 2015, was about N1tn. Today, it is over N5tn and as much as we desire to depopulate the growing number of unemployed people in the country, the reality is that the government is not really a direct job creator.
“The role of government is to create an enabling environment for the private sector to create jobs. The total number of people in the employment of the federal government nationwide, including all of the security services, the military and all of that, is under 1.5 million people.”
This likely means that 1.5 million federal workers will benefit from the proposed N35,000 monthly palliative proposed by the Federal Government to cushion the effects of the removal of subsidy on the Premium Motor Spirit, popularly known as petrol, for a period of six months.
The Federal Government is expected to spend N52.5bn monthly on 1.5 million federal workers.
This means that a total of N315bn will be spent in six months, with each civil servant getting a total of N210,000.
The President General of the Maritime Workers Union of Nigeria, Adewale Adeyanju on Monday, directed that all members of the union to resume work on Tuesday (today) instructed by the Nigeria Labour Congress.
Working-class Nigerians
However, many people of working-class age will not benefit from this Federal Government’s new allowance (N35,000)
Earlier, about 88.2 per cent of working-age Nigerians have no salary-paying jobs.
Data from the National Bureau of Statistics showed that only about 11.8 per cent of working-age Nigerians were engaged in wage employment in the first quarter of 2023.
According to the asksource.info site, wage employment includes any salaried or paid job under contract (written or not) to another person, organisation, or enterprise in both the formal and informal economies.
The NBS also disclosed that there was a decrease of 1.6 percentage points in the percentage for wage employment from 13.4 per cent in Q4 2022 to 11.8 per cent in Q1 2023.
The Nigeria Labour Force Survey (4th Quarter 2022 and 1st Quarter 2023) report by the NBS read, “The share of wage employment was 13.4 per cent in Q4 2022 and 11.8 per cent in Q1 2023.”
It means that 1.6 per cent of working-age Nigerians either resigned or lost their salary-paying jobs between Q4 2022 and Q1 2023.
However, the NBS did not provide a value for the total number of working-age Nigerians, unlike in its previous report.
In 2020, the NBS placed Nigeria’s working-age population at 122 million.
Using the figure of 122 million, the N35,000 monthly will not cover up to one per cent of working-age Nigerians.
However, the Federal Government announced that it would commence payment of N75,000 to 15 million households at N25,000 per month for a three-month period from October to December 2023.
At least 42.69 million poor Nigerians were excluded from the N5,000 monthly cash transfer since its inception in 2016.
Also, the Senate earlier approved Tinubu’s request to borrow $800m loan from the World Bank. It also amended the 2022 Supplementary Appropriation Act to accommodate the provision for N500bn for palliatives to mitigate the effect of petrol subsidy removal on poor Nigerians.
According to Tinubu, the $800m loan will be used to cater for the welfare of the vulnerable and poor households in the country under the National Safety Net Programme, while the sum of N8,000 will be transferred monthly to the bank accounts of 12 million poor and low-income households for six months.
However, findings showed that not less than 3.7 million poor households would be excluded from this new cash transfer programme.
Urban poor
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has stressed the need for the government’s palliatives to focus on those in the urban poor.
Oyedele did this on Monday at The Platform, a bi-annual good governance conference hosted by Poju Oyemade, the Senior Pastor of Covenant Christian Centre in Lagos.
He noted that the urban poor are the most affected by the government’s policy, which has made life almost impossible for them.
“Since fuel subsidy removal, it is a painful sacrifice that Nigerians are making… If you are an urban poor, life is almost impossible. When the subsidy was removed, the price of PMS at the pump went up by more than 200 per cent. You know what happened? Traffic in Lagos disappeared.
“One of the reasons it disappeared was because a lot of people could no longer maintain buying fuel to be on the road and then they park their cars. Do you think those are the upper-class people? No! The upper-class people will just complain briefly, they will pay and move on. They drove exactly the way they drove before, after the removal,” Oyedele said.
He further noted that the policy is necessary, but the government needs to commit every saved amount from this policy to helping those who really need it.
He also said that the most impacted by the subsidy removal policy are not in the villages.
“Many villages have no idea that they have removed fuel subsidy. But if you are an urban poor, you commute to work; you pay rent; you buy food. We produced our foods in the village. In other words, we must make sure that we are able to attend to these problems where it is most painful,” Oyedele said.
He further advised Nigerians to stop praying for the country’s refineries to work. Rather, they should channel such energy into demanding their sale.
