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The current acceleration of inflation in the country is having a detrimental effect on the buying power of Nigerians, as prices continue to rise relentlessly. The current situation has spurred calls from labour for a pay raise that corresponds with reality. HENRY FALAIYE writes on the push by labour for salary increment
In 2019, when the Federal Government raised the minimum wage to N30,000, workers breathed a sigh of relief. Between 2019 and 2023, the rate of inflation has more than doubled. Inflation, which was 11.40 per cent in 2019, has accelerated to 22.04 per cent in March 2023, setting the stage for labour clamour for salary increment. They argued that the rising inflation has eroded their purchasing power and worsened their standard of living.
Over the years, labour unions in Nigeria have been clamouring for government intervention in solving labour-related issues to place the economy in a good state and protect workers in the country. These issues include the minimum wage, unpaid salaries, job security, pension reform, and better working conditions.
The Nigeria Labour Congress and other workers’ unions claimed the current N30,000 minimum wage was unsustainable in the face of the country’s current high inflation rate.
The Assistant General Secretary of Nigeria Labour Congress, Christopher Onyeka, said, the minimum wage was statutory.
“The last minimum wage was signed into law in 2019 and it expires after five years, which means a new one will come up by next year.
“We are supposed to have set up and put in motion re-negotiation of a new one. The fact remains that if the government considers that a lot of things have gone up and that Nigerian workers are suffering as a result of these policies, then the government can make an award to workers. However, it is certain that by next year there will be a negotiation of the minimum wage,” he told The PUNCH exclusively.
According to him, labour has started discussions to ensure that workers are given the right treatment and receive the right pay and ensure that more workers are also covered and included in the minimum wage calculation.
The National President Association of Senior Civil Servants of Nigeria, Tommy Okon, told The PUNCH that the incoming government of Senator Bola Tinubu must prioritise tackling the current economic challenges that have impoverished Nigerian workers.
He argued that without a stable economy, a pay raise would be ineffective, as it would be wiped off by inflation.
“There is the need for the new administration to take a critical look at workers’ welfare, a minimum wage of N30,000 that is no longer tenable because of the socio-economic challenges. The issue of the oil subsidy removal where we believe that the socio-economic indices will determine in terms of infrastructure.”
Meanwhile, one area labour is set for a showdown with the government is the subsidy on petrol.
While workers believe the government was spending too much subsidising petrol, it has argued that an outright removal of petrol subsidy would worsen the living conditions of Nigerians, who were already grappling with economic hardship.
The Nigerian National Petroleum Company Limited revealed earlier year that the country was spending over N400bn monthly to subsidise imported petrol.
And the Nigeria Extractive Industries Transparency Initiative last year said the government had spent N13.7tn on petrol subsidy in 15 years.
The pressure on government revenue due to the huge amount spent on petrol subsidy had stated its resolve to end the subsidy regime in June.
The Minister for Finance, Budget and National Planning, Zainab Ahmed, explained that the government cannot sustain the amount being spent on petrol subsidy.
“In June 2023, we should be able to exit. The good thing is, we hear a consistent message that everybody is this thing needs to go because it is not serving the majority of Nigerian,” the finance minister said in an interview with Arise TV in January.
However, the labour unions had stated that they would only support petrol subsidy removal based on some conditions.
The Nigeria Labour Congress and the Trade Union Congress asserted that they would only allow the removal of fuel subsidy if the incoming administration of Bola Tinubu takes steps towards the repair and revitalisation of government refineries across the country and allows modular refineries.
According to them, failure to do this, they said they would oppose the subsidy removal and mobilise workers to protest against the decision.
The Chief Executive Officer of Centre for the Promotion of Private Enterprise, Muda Yusuf, stated that the fuel subsidy should be the number one issue the incoming administration must address because labour had been consistently opposed to it and the matter had been lingering for so many years.
He said, “Unless they sort it out, it will be difficult for us to progress as an economy because the fuel subsidy issue has been dragging us back in so many ways from the revenue standpoint and from an investment standpoint, from the foreign exchange standpoint and even from a corruption standpoint.”
He noted that the cooperation of labour was important for the new administration to manage the removal of petroleum subsidy smoothly and avoid any potential disruptions.
“This issue is critical and requires careful consideration and strategic planning,” Yusuf averred.
Meanwhile, aside from the issue of minimum wage and petrol subsidy removal, labour stakeholders have identified areas the incoming government must look into.
The Director-General of Nigeria Employers’ Consultative Association, Mr Adewale Oyerinde, claimed that the Nigerian labour and industrial relations system had been in a worrisome state for many years.
He said, “Certain lingering challenges have not only driven a wedge between the harmonious relationship that should exist between labour and government but have also negatively affected productivity and development.”
Furthermore, he highlighted some other factors that weaken labour relations, including governments’ inability to operate in good faith and honour agreements, negotiations concluded under duress, extended adjudication, abandonment of dispute resolution mechanisms as provided for in statutes, among others.
According to him, the incoming administration should, within its first 100 days, foster the passage of the long-awaited revised labour laws so that the country’s labour relations system can meet current realities and conform to global best practices.
Oyerinde noted that the current Labour Act lacks the command to address emerging labour-related issues.
According to him, it is weak and gradually become impractical.
He said, “Focus should be given to strengthening the institutions of labour relations. These Institutions include the National Labour Advisory Council, the Industrial Arbitration Panel and indeed the Ministry of Labour and Employment. The NLAC is a strong Institution that should be used to promote cooperation and partnership between all Stakeholders as it is done in other developed countries.”
However, he explained that there should not be threats of a strike before the government responds to issues within its scope and responsibility.
“The minimum wage will be due for a review before May 2024. It is expected that machinery for the review should be put in place now,” he declared.
In the meantime, the President of the Association of Professionals of Nigeria, Dr Obiora Madu, maintained that the country’s workforce had to be more productive.
Madu said, “The main issue in the labour industry is to enhance productivity rather than solely demanding an increase in wages. To tackle the labour crisis effectively, the Federal Government needs to concentrate on gauging productivity. By doing this, it may be feasible to pinpoint and address some of the labour-related problems.”
He further reasoned that labour should have performance indicators designed with them so that it is possible to measure.
“The key to overcoming the labour challenges is to increase productivity. It is important for labour to evaluate its productivity before asking for higher wages. By participating in the creation of performance indicators, it can monitor its progress and ensure that the government is not making decisions without its input. Ultimately, involving labour in the process will lead to better outcomes for everyone,” he mentioned.
According to him, labour must adapt to the demands of the 21st century. He claimed labour issues cannot be resolved through protests and strikes alone.
“They need facts-based arguments and that is where performance indicators come in.
“While it is acceptable to acknowledge that take-home pay may not be sufficient, it is critical to consider the rationale for any proposed wage increases and the source of funding. Although public service is not profit-driven, it is important to note that payment should be commensurate with productivity. Simply receiving payment without regard for work performance or accountability is not acceptable,” Madu further stated.
He noted that a more friendly labour union will be more acceptable.
He stated to avoid frequent strikes in the country, especially in the education sector, the government must provide factual evidence to support its claims of impossibility, and labour must do the same to present superior arguments.
“Protests and strikes are no longer effective solutions because outsourcing and remote work options allow employers to send workers home. As a result, alternative solutions must be explored,” he argued.
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