Late in the evening of October 1, 2023, the Minister of Information and National Orientation, Mal. Mohammed Idris released a statement announcing resolutions reached between Federal Government and leadership of Nigeria Labour Congress (NLC) and Trade Union Congress (TUC). The resolutions acknowledge decisions of the Federal Government to pay all federal government employees additional N25,000 for the next six months, fast-track provision of Compressed Natural Gas Buses (CNG) to ease public transportation, provide funds for micro and small-scale enterprises, waived VAT on diesel for the next six months, and commence payment of N25,000 to 15 million households from October – December 2023. These are measures announced by President Asiwaju Bola Ahmed Tinubu in the Independence broadcast to the nation.
Accordingly, among other agreements, NLC and TUC agreed to consider these offers by the Federal Government with a view to suspending the strike action scheduled to commence on Tuesday, October 3, 2023. Shortly following the statement by the Honourable Minister, the Chief of Staff to President Asiwaju Tinubu, Rt. Hon. Femi Gbajabiamila announced that Government has reviewed upward the proposed additional payment to federal government employees from the N25,000 to N35,000. Certainly, this may have been necessitated by demands from labour leaders who were early reported to have rejected the N25,000 offer made by President Asiwaju Tinubu.
Both the Federal Government and leadership of NLC and TUC should be commended for this development. With that, no doubt the development should encourage NLC and TUC leaders and their members and by extension Nigerians to have stronger confidence in the commitment of President Asiwaju Tinubu and the Federal Government to address challenges facing Nigerians in the face of existing hardship occasioned by the withdrawal of petroleum subsidy and therefore suspend the strike. This is not just about the offers the government made as contained in the Independence Day Broadcast of President Asiwaju Tinubu, but more about the openness with which the government used the offers to engage leaders of NLC and TUC immediately after the broadcast.
If past experiences are anything to go by, ideally following the broadcast of President Asiwaju Tinubu, government would have resorted to propaganda and opted for some shadow engagement in the media about how the government has met all the demands of labour. Instead, government invited leadership of NLC and TUC, listen to all their demands and responses to the offers being made. With clear open mind, government was able to agree with the leadership of NLC and TUC that instead of limiting the payment of N25,000 monthly to junior category of federal employees, the payment will be made to all category of federal employees. At the same time, government also agreed with the leadership of NLC and TUC to increase the payment to N35,000 monthly for the next six months.
This clearly demonstrated strong commitment by the President Asiwaju Tinubu led Federal Government to manage public policy based on disposition to negotiate with Nigerians and win agreements. This has been the foundational principles of democracy that has been weak or ineffectual. As a young government, less than four months in office, all committed democrats should encourage the President Asiwaju Tinubu led government to build on this. Building on the resolutions reached is not just about commending government and the leadership of NLC and TUC, but to highlight all the challenges that would come with the implementation of the proposals, so that the scope of negotiations is broadened to engender sustainability.
Some of the challenges that can readily be identified include for instance what happens at the end of the six months of implementing the additional N35,000 payment to federal employees? Noting that already government has announced its intention to open negotiations for the review of minimum wage in the country, should Nigerians expect that agreement for a new minimum wage will be reach within the six months? If agreement for the new minimum wage is to be reached within the six months, should Nigerians expect that the new minimum wage will not be less than the aggregate of the current minimum wage plus the additional N35,000 being offered for the next six months? In which case, since the current minimum wage is N30,000, should Nigerians therefore expect a new national minimum wage at least N65,000?
Before attempting to explore any probability of a new N65,000 minimum wage, perhaps, it will be necessary to first check the implication of additional N35,000 to all federal employees. Based on records of Bureau of Public Service Reform (BPSR), total number of workers in the Federal Civil Service is 720,000, with monthly cost of about N320 billion. Additional N35,000 to all category of federal employees will mean additional N25 billion to the monthly personnel cost of federal government, which is about 7.7% increase. By extension, it means that if minimum wage is to be increased to N65,000, the additional cost to federal government would be less than 10%.
What about workers at states, local governments, and organised private sector? Can states, local governments and organised private sector also be given similar offers? Can these categories of employers afford any additional offer? If not, what contingency measure should be taken to capacitate these categories of employers to mitigate the sufferings of their workforce occasioned by the withdrawal of subsidies? Finding answers to these questions is at the root of challenges of managing labour relations in the country. In fact, inability to address these questions is responsible for all the challenges of guaranteeing ability of all employers to comply with statutory provisions of minimum wage in the country. As it is, beyond the Federal Government, many state governments and some big private employers, are already in default of existing statutory provision of national minimum wage of N30,000.
In fact, not up to 20 states governments have implement the N30,000 minimum wage. Almost all the 774 local governments are in default. Many would rationalise this with reference to corruption and fiscal indiscipline of political leaders. Without dismissing such allegations, the reality of managing labour relations in the country require higher commitment to find solutions to problems of corruption and fiscal indiscipline by political leaders. Finding solutions to the problems of corruption and fiscal indiscipline by political authorities is a function of strengthening accountability.
Most times, issues of accountability are reduced to question of management of existing resources. Part of the received wisdom in Nigeria is that government has all the resources, which is being embezzled by political leaders, especially governors at state level. Many references are made to issues of security vote. If revenue indices are anything to go by, the truth is that Nigeria is poor. With a federal budget of about N20 trillion, which is about $30 billion, Nigeria is operating at about 10% its spending capacity. Countries like Brazil, India, Indonesia and even South Africa are operating budgets of more than $200 billion.
At state level, except for Lagos State, none of our state has N1 trillion budget. In fact, most states budgets are below N250 billion. With reference to personnel cost, average monthly costs for state governments are more than N2 billion. Many states generate less than N1 billion monthly. Average receipt from the federation account is between N3 and N4 billion. With such reality, capacity therefore to make additional payments to workers to cushion the effects of high prices of goods and services because of withdrawal of petroleum subsidy will be expecting too much.
Yet, given the reality, all employers should be able to copy the federal government initiative of making additional payments. Making additional payments to workers should be condition precedent for a new national minimum wage. The question is whether such condition precedent would be tailored towards strengthening Nigeria’s federalism. Debates about strengthening Nigeria’s federalism with respect to management of labour relations, especially the issue of minimum wage, have produced strong debate about amending the 1999 Nigerian Constitution to move labour matters from the exclusive list to concurrent list. This has produced a strong ideological opposition by the labour unions.
Given all the challenges facing Nigeria as a nation, and the need to produce a new template of partnership, it is important that the current negotiation between labour and federal government is used to lay a sustainable foundation for strong partnership with organised labour and employers. Part of the goal should be to introduce strategies to promote growth and competitiveness in all sectors, to improve productivity and wages. Therefore, without putting on the table any recommendation that could have ideological connotation, on account of which therefore would elicit any opposition, the question of increased revenue earnings should be jointly reviewed by representatives of governments (covering federal government and states), employers organisation and NLC and TUC.
Reviewing revenue earnings of employers should be objectively done in ways that should strengthen issues of accountability by public authorities in the country. Integral to strengthening accountability by public authority is the issue of setting clearly defined ambitious development targets. Noting that already, President Asiwaju administration has committed itself to achieving $1 trillion GDP in the next eight years, this must be broken down to indices of productivity in the country, which all employers and NLC and TUC should be committed to achieving based on negotiated partnership agreements.
Clear legal and institutional frameworks for collective bargaining in Nigeria between all employers of labour, including governments at all levels, and NLC and TUC should be strengthened. One of the things that must be acknowledged is that Nigeria has all the needed laws to facilitate the process of negotiations. These are provided under the 1999 Nigerian Constitution as amended, Trade Union Act, Labour (Employment) Act, Factory Act, Workmen’s Compensation Act, Trade Disputes (Essential Services) Act, etc. Procedural rules and regulations governing workplaces, including negotiations between employers and employees are provided. Specifically, ILO Convention 98, which guarantees the right to organise and bargain collectively is ratified under the Trade Unions Act. One of the things that can be deduced is that practice of collective bargaining between workers’ and employers’ organisations should be correlated with productivity and revenue indices.
A major challenge of Nigeria’s labour relations is the question of whether the needed environment will be created for all actors in the bargaining process to have confidence and commit themselves to producing the desired outcome of higher productivity and therefore higher revenue based on which demands for higher rewards can be sustained. That is what the current reality requires. Without achieving higher productivity and higher revenue in all sectors of the economy based on strategies to promote growth and improve productivity, the current offer of N35,000 monthly to federal employers will not cover all workers and may not translate to sustainability by the federal government in terms of producing a new national minimum wage that will aggregate the new federal government offer.
Therefore while commending both the Federal Government and the leadership of NLC and TUC for the landmark resolutions reached on October 1, 2023, which would have removed the threat of the October 3, 2023 strike action, it is important that the negotiation between the federal government, on the one hand, and NLC and TUC, on the other, is expanded to include all employers inclusive of organised private sector and state governments. The negotiations should be oriented to produce agreements to improve productivity and produce higher revenue in all sectors of the Nigerian economy based on which necessary frameworks of partnership agreements between all employers and organised labour in the country should be achieved.
This will give life to President Asiwaju’s commitment as contained in Renewed Hope 2023, when he categorically affirms that ‘Show us a door, we shall open it. Show us a road, we shall travel it. Show us a problem, we shall find a way to fix it. Show us an injustice, we shall strive to correct it, no matter how long it takes or how hard it gets.’ Improved productivity and increased revenue are the road to fixing the problem of high cost of living in the country. Putting in place frameworks for negotiation between employers and organised labour is what is required to correct injustice in the workplace in all sectors and in every section of the country. More than anything, this will open the door to renew the hope of Nigerian workers.
Mr Lukman writes from Kaduna