Minimum wage, inflation Will Push More Nigerians into extreme poverty in 2023 – Daily Times Survey
By Joy Obakeye
There are indications that more Nigerians risk becoming extremely poor this year if the Federal Government fails to proactively take steps to review the national minimum wage which is due by 2024.
According to the National Bureau of Statistics in its 2022 Multidimensional Poverty Index (MPI) Survey, 133 million people are multidimensionally poor.
Also, a report by the World Bank in its Nigeria Development Update stated that five million Nigerians have been pushed into poverty as a result of inflation in 2022.
Inflation, higher unemployment and poor remuneration have impacted Nigeria’s per capita, leaving Nigerians with little or nothing to survive on.
With inflation at 21.8 per cent in January 2023 and food inflation at 24.3 per cent in January, stakeholders believe the time for a significant increase in the minimum wage is now.
Nigeria’s minimum wage was reviewed to 30,000 Naira in 2019 at a time when inflation was hovering around 11 per cent. However, not all public and private sector players have implemented the current wage, some even owe several months. The question now is, what sort of increase can justify current macroeconomic trends?
In June, the Federal Government is expected to end payment of petrol subsidies, but less emphasis has been made on efforts to cushion the short-term impact on Nigerians.
The World Bank report also noted that over half of the population of Nigeria is multidimensionally poor and cooks with dung, wood or charcoal, rather than clean energy.
This a sign that more gory days lie ahead for Nigerians who depend on a monthly income of 30,000 Naira.
With a review only ripe In 2024, the National Salaries Incomes and Wages Commission (NSIWC) says it has initiated the process for the review of the National Minimum Wage, while also assuring Nigerian workers that it would set in motion the process that would lead to the approval of a new minimum wage to be implemented on or before May 2024.
One major pointer is the political will of the next administration in an election cycle year. As a new administration is sworn into power by May 29, stakeholders are optimistic that if a people-oriented government is sworn in, the review can be expedited.
Speaking with Daily Times, the National President of Nigeria Labour Congres (NLC) disclosed that about two states are yet to implement the minimum wage.
“We had about two states that are yet to implement the minimum wage before we went to the o International Labour Conference (ILC) and we brought it to the floor of the International Labour Organization in Geneva in Switzerland.”
He stressed that the two states are Abia and Zamafara, “we are going to get an update on what has happened in Zamafara. Some other states are implementing, like in Imo state where they are calling people ghost workers when people are at work.”
“Abia state is the main culprit and we shut down the state on Monday (27th February) over unpaid salaries, allowances owed in different State Government ministries, departments, agencies, schools, and local governments and non-implementation of minimum wage.
They are trying to blackmail us that if we continue our action in the state, there may not be an election this Saturday, Ajaero said.
According to the Deputy General Secretary of Nigeria Labour Congress, Chris Onyeka, in a chat with Daily Times, the periodic review of the national minimum is statutory as the Law setting up the current one gave it a life of 5 years.
“The nation’s Labour Laws do not specifically talk about the national minimum wage but speak to the timeliness of engagement in all issues that are collectively bargained.
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What governs this process is therefore the principles and laws that govern collective bargaining,” he opined in his response to what the law says about an urgent review.
“The implications are that parties in this case; Government, Employers and Workers must adhere to agreed timelines and outcomes of the discussions.
“As it concerns the next national minimum wage, it requires that the process begins early so that the current one will be replaced when it expires”.
Another major concern is, how early can such review begin. At a period when pre and post-elections take nearly the entire year.
The World Bank believes that the government must make “business-unusual choices” to avoid a scenario in which up to 80 million working-age Nigerians do not have full-time jobs by 2030 — and up to 23 million, more Nigerians could be living in extreme poverty.
In the year, Nigerians have dealt with currency and petrol scarcity, rising food costs and a host of other issues. However, the net salaries are not a reflection of a balanced life.
In other cases, some organisations end up owing staff salaries on the occasion that the bottom line is severely constrained.
Stressing further, the NLC official maintained that efforts are ongoing to engage government officials in the timely review of the minimum wage.
“Government is a continuum so, we relate with the bureaucrats who outlive the political leaders. Whoever eventually leads the next administration does not matter as we would engage them the same way we engaged the current administration.
“However, trade union leaders are already collating indices that would be used to calculate the various benchmarks that would underline our argument during the negotiation for a new wage floor when the time comes.”
The Minister of Labour and Employment, Senator Chris Ngige, reiterated that the present government would fast-track the process to see that a new minimum wage would be ready by May next year while stating that a failure to do so, workers can seek redress at the National Industrial Court of Nigeria.
“For instance, the NMW review has a five–year duration that will be adhered to by stakeholders, workers can now approach the National Industrial Court of Nigeria (NICN) for enforcement of their rights to receive the NMW,” he said.
Reacting to what the Minister of Labour said about the upward review of the minimum wage, Comrade Ajaero lamented that the labour minister can’t be talking about the review in 2024 when he will not be in government.
“You can see that there is no need for interpretation to see that it is political. If he talks of review let him do it before they leave, Ajaero said.
At a time when household expenditure has risen by over 12 per cent year on year, due to rising costs of goods and services, workers are fast seeing basic household needs elude them.
With accelerating inflation, the real value of wages will continue to fall and this affects how far salaries go in the day-to-day life of employees.
While it is being reported that the economy has improved, culminating in a 3.1 per cent growth in 2022, most of it is elusive. It is eluding a vast majority of Nigerians and has not been able to reduce poverty or lead to the creation of sufficient jobs.
Meanwhile, the Nigeria Agenda 2050 is designed to take the country through to Upper Middle-Income Country.
The Nigeria Agenda 2050 projection is an annual average real GDP growth of seven per cent. The real growth rate of the Gross domestic product (GDP) of the first medium-term National Development Plan 2021-2025 on average will be 4.65 per cent and this will increase to 8.01 per cent in the second NDP.
The plan also aims to increase the number of full-time jobs created to around 165 million during the Agenda period to spur poverty reduction.
