After extensive discussions, the federal government and organized labor were unable to agree on a new national minimum wage. The federal government increased its offer from N60,000 to N62,000, while labor reduced its demand from N494,000 to N250,000.
The tripartite committee, tasked with determining a suitable minimum wage, acknowledged the necessity for an increase based on various socio-economic and political considerations, as well as international standards. They proposed N62,000 per month, supported by the government and the Organized Private Sector (OPS), while labor continued to push for N250,000 per month.
Following the meeting, Imo State Governor Hope Uzodinma stated that the committee would forward their recommendations to President Bola Tinubu. Trade Union Congress (TUC) President Festus Osifo emphasized the need for wages that reflect economic realities.
Negotiations began after President Tinubu directed the Minister of Finance to present a new minimum wage proposal. Initial government offers ranged from N48,000 to N60,000, all of which were deemed inadequate by labor unions.
Before the recent strike, the Nigeria Labour Congress (NLC) and TUC had demanded N494,000, citing the economic conditions. The Nigeria Governors’ Forum (NGF) warned that the proposed N60,000 minimum wage could financially cripple many states, hindering their ability to fund essential services.
Despite opposition from governors and the private sector, the federal government indicated a willingness to consider a figure higher than N60,000, potentially up to N65,000, according to government sources.
The NGF argued that paying N60,000 would exhaust many states’ federal allocations, leaving no funds for infrastructure, healthcare, or education. They urged labor leaders to consider a fair and sustainable agreement.
The organized labor is advocating for a comprehensive reassessment of the minimum wage in line with the National Minimum Wage Act of 2019, which mandates reviews every five years. The last adjustment was made in 2019, raising the minimum wage to N30,000 from N18,000.
President Tinubu appointed a 37-member panel led by Vice President Kashim Shettima to recommend a new minimum wage. The panel includes representatives from federal and state governments, the private sector, and labor unions.
Nigeria has faced economic challenges in recent years, including a recession in 2016, modest growth from 2017 to 2019, and a downturn in 2020 due to the COVID-19 pandemic. The removal of fuel subsidies and currency devaluation further strained the economy, with inflation rising from 22.4% in May 2023 to 28.9% in December 2023.
State governments have expressed concerns about their financial capacity to meet the proposed wage increases, citing the need for fiscal sustainability. Data from the Nigeria Governors’ Forum indicates that 11 states, including Zamfara, Abia, Ekiti, Gombe, Imo, Katsina, Kogi, Oyo, Plateau, Sokoto, and Yobe, have negative net revenues and would struggle to pay the N60,000 minimum wage.
