According to Atiku Bagudu, Minister of Budget and Economic Planning, the Federal Government of Nigeria intends to set aside ₦3 trillion to Finance the implementation of a new Minimum Wage as well as pensions and gratuities. The Senate Committee on Appropriations was met when this announcement was made. Recently, ₦70,000 was authorized as the new minimum wage by President Bola Tinubu, who also promised to review it every three years. A budget amendment that would raise it to ₦33.7 trillion for 2024 is being considered by the National Assembly.
₦3.2 trillion of the planned budget is allocated for capital costs, and ₦3 trillion is allocated for ongoing expenses. Senator Adamu Aliero and Senator Adams Oshiomhole underlined the need of legally supporting the human expenditures related with the minimum wage increase, while Senator Opeyemi Bamidele underscored the need for funding capital projects and public Welfare initiatives. Prioritizing Infrastructure projects that could draw investments, Minister Bagudu gave assurances that the budget additions would be financed by reserved profits rather than loans.
NLC acted in solidarity and accepted the ₦70,000 minimum pay.
In front of Senate committees, ministries, departments, and agencies will defend their specific budgetary allotments, according to Senate Spokesperson Senator Yemi Adaramodu. While infrastructure projects like roads and railroads would be improved by the ₦3.2 trillion capital budget, the ₦3 trillion recurring budget will pay for pensions, gratuities, and the minimum wage. Despite its original demands for a higher minimum salary, the Nigeria Labour Congress (NLC) acted in solidarity and accepted the ₦70,000 minimum pay in order to prevent further misery. The NLC’s Lagos State Chapter, on the other hand, contended that the higher Cost Of Living in Lagos makes the minimum wage inadequate for workers, and they want more considerations.
President Bola Tinubu’s ratification of a new minimum wage of ₦70,000 marks a dramatic change in policy intended to alleviate the financial struggles of Nigerian workers. It is anticipated that the effects of this change will differ depending on the areas and industries. For example, workers in areas with significantly higher costs of living, including Lagos, Kano, Rivers, and Abuja, might find the new income insufficient. The Nigeria Labour Congress’s (NLC) Lagos State Chairman, Funmi Sessi, emphasized that “high rents, transportation costs, and feeding expenses cannot sustain workers in Lagos.” This opinion emphasizes the necessity of region-specific pay adjustments to take into consideration the “Lagos factor” and other such difficulties in other high-cost places.
It has always been controversial to raise the minimum wage in Nigeria.
The ₦3 trillion in recurring expenses will pay for pensions, gratuities, and the new minimum wage. To guarantee that the workforce’s financial demands are satisfied without the need for further borrowing, this budgetary allocation is crucial. In order to preserve fiscal stability, Minister Bagudu gave his word that the additional funds for the budget would come from retained profits as opposed to borrowing. The prevailing economic circumstances offer a crucial framework for these modifications. In recent times, Nigeria has experienced prolonged inflation, elevated rates of joblessness, and financial volatility.
As of June 2023, Nigeria’s Inflation rate was 22.79%, according to the National Bureau of Statistics, which made the country’s cost of living problem worse. In response to these financial strains, the government has raised the minimum wage; nevertheless, the success of this measure hinges on its capacity to control inflation and guarantee uniform application throughout the nation. It has always been controversial to raise the minimum wage in Nigeria. In 2019, the salary was raised from ₦18,000 to ₦30,000, marking the most recent notable modification.
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Given the pressing need to address the economic realities that Nigerian workers face, this most recent rise to ₦70,000 represents a significant step forward. To accomplish its desired impact, this strategy needs to be supplemented with strong economic management and focused regional strategies. The government may want to think about other support systems, including Subsidies for necessities in high-cost areas, in order to increase the efficacy of these initiatives. Furthermore, to address new issues and guarantee that the wage changes actually raise the living standards of Nigerian workers, constant communication with labor unions and other stakeholders is essential.