On Wednesday, June 5, the Nigerian Senate passed a bill proposing a substantial 300 percent increase in the salaries, allowances, and fringe benefits of judicial office holders in the country.

This legislative move follows the bill’s earlier approval in March by the House of Representatives.

Key Provisions of the Bill

The bill outlines the new remuneration structure for various judicial positions, reflecting a substantial upgrade from the current packages. Key figures include:

• Chief Justice of Nigeria (CJN): Monthly package of N5.39 million.
• Justices of the Supreme Court: Monthly package of N4.21 million.
• President of the Court of Appeal: Monthly package of N4.48 million.
• Justices of the Court of Appeal: Monthly package of N3.73 million.
• Chief Judges and Presidents of various courts: Monthly packages of N3.53 million.

Additional allowances not included in the monthly packages comprise leave allowances, an estacode of $2000 per night (where applicable), duty tour allowances, severance gratuity of N80.78 million upon successful completion of tenure, and an optional motor vehicle loan repayable before tenure expiration.

The report on the bill was presented by Senator Mohammed Monguno (APC – Borno North), Chairman of the Committee on Judiciary, Human Rights, and Legal Matters. He stated that the bill had received unanimous support from stakeholders during the public hearing, reflecting its alignment with the justice sector reform initiatives of the current administration.

Senator Monguno highlighted that the bill is both timely and necessary, given the current economic realities and high inflation rates in Nigeria. He noted that the remuneration for judicial officers had long been overdue for an increase.

“The proposed legislation is apt and timely as the increase in remuneration of judicial office holders is long overdue in light of the present economic realities and high inflation in the country,” he said.

The bill is seen as a crucial step toward ensuring judicial independence and integrity. Monguno explained that adequate remuneration would allow judicial officers to focus on their professional development without financial concerns, thereby improving their professionalism and decision-making skills.

He stated, “Fair compensation for judicial officers is crucial for maintaining public trust in the judiciary’s impartiality and integrity. When Judges are adequately compensated, it demonstrates a commitment by society towards the important role they play in upholding justice.”

An essential aspect of the bill is its potential to attract and retain highly qualified and experienced professionals within the judiciary.

“The increase in remuneration for judicial office holders is essential to attract and retain highly qualified and experienced professionals who possess the necessary skills, knowledge, and integrity to serve on the bench,” Monguno remarked.

The bill also addresses the financial security of retired judicial officers, ensuring they remain comfortable after years of dedicated service.

Monguno said, “Certainly, the bill if passed will give financial security to retired judicial Officers after years of dedication in the profession and allow them to remain comfortable during their retirement.”

The proposed increments have been accounted for in the 2024 Appropriation Act, ensuring that the financial provisions for these adjustments are already integrated into the national budget.

Widening the gap between political elites and the people

However, this move said to be aimed at curbing corruption and ensuring the independence of the judiciary, has sparked widespread debate about the disparity between the remuneration of public officials and the average Nigerian worker.

This is especially so as it is coming at a time when labor unions are battling with the government for an increase in minimum wage.

Currently set at N30,000 per month, the minimum wage is significantly lower than the proposed living wage of N494,000 per month demanded by the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC). Although the government has shown some willingness to negotiate, potentially increasing the minimum wage to slightly over N60,000, this still falls short of meeting the rising cost of living.

The stark disparity between the earnings of high-ranking officials and ordinary workers has led to criticism that Nigerian leadership prioritizes the welfare of the elite over the average citizen. The CJN’s new monthly salary of N5.39 million is over 179 times higher than the current minimum wage of N30,000, highlighting systemic inequality.

Proponents have argued that higher remuneration for judges will reduce the temptation for corrupt practices, ensuring judicial decisions are made impartially. However, this move also reinforces the public perception that leaders are self-serving, allocating substantial resources to their compensation while minimum wage earners struggle with inflation and economic hardship.

My only Economics teacher remains OA Lawal. In SS1, I bought his Economics textbook, read and went and wrote GCE (external WAEC) and made a distinction. I had told my school principal to allow me to register for 15 subjects, in senior secondary,  but he said WAEC allowed only 9. I said “Sir, it is unfair to give an option to either do Further Maths or Economics, Geography or Lit in English…I do the 9 but others, I will write in GCE “. So, I started reading OA Lawal and since then, I have been applying his teaching.

When Nigeria promulgated its floating of currency, and fuel subsidies, I tested them with OA Lawal basic things and wrote:

1. “Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted: “- June 2023
2. “Nigeria will either pause the full floating of its currency or return back to fuel subsidy ” – July 2023

It was so clear that the Nigerian economy will struggle under those two policies. I studied banking & finance to doctoral level, and when the African Union was rolling to make the currency one, a decade ago, I sent my thesis, arguing against unifying the currencies without prior regional convergence. Doing that would trigger welfare losses as a supranational central bank would struggle within Africa’s heterogeneous economies. That project was paused! Read the piece on AU website:

“In his O’ Level textbook on economics book, OA Lawal explained demand and supply and the movement of price on the demand-supply curve. If I apply what he explained in that book, floating naira with no capacity to earn USD dollars will kill Naira, because there is an asymmetric imbalance on demand and supply of USD in the Willing Buyer, Willing Seller nexus. In other words, two people may each have $100 to sell while twenty people want to buy each $100. If you do not close that number to near parity, the equilibrium point will keep shifting and I do not see how Naira will stabilize because demand outweighs supply here.”

Now, we are spending more on fuel, our currency has lost value, inflation is high, etc. just because Nigerian leaders fail to apply common economics in our governance framework. Do you need a PhD to know that if demand is higher than supply (ceteris paribus) for an inelastic product that price will move dangerously to the wrong side? 

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has introduced the Accelerated Stabilization and Advancement Plan (ASAP), aimed at tackling key economic challenges and stimulating development across various sectors.

This announcement comes amidst revelations that the government is still subsidizing premium motor spirit (PMS), commonly known as fuel, despite its earlier reiterations that the subsidies have been totally eliminated.

The ASAP document reveals, in what appears to be the first official acknowledgment of ongoing fuel subsidies, that the government continues to support downstream fuel consumption. The document projects that “At current rates, expenditure on fuel subsidy is projected to reach N5.4trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022.”

The presentation of the ASAP to President Bola Tinubu on Tuesday follows Mr. Edun’s recent television interview, where he hinted at a forthcoming stabilization package. The plan, which comes with an accompanying Executive Order to enhance its effectiveness, addresses the numerous economic challenges threatening the administration’s reform initiatives.

ASAP, which was accelerated following the nationwide strike by organized Labour, is designed to advance President Tinubu’s eight priority areas related to the economy and is structured into several sub-committee plans, including Agriculture and Food Security, Energy (Oil, Gas, and Power), Health and Social Welfare, and Business Support.

The executive summary of ASAP highlights the urgent need to mitigate the “difficult economic conditions threatening to unravel bold reforms undertaken by Mr. President.” The plan identifies persistent high inflation, high interest rates, and volatile exchange rates as major issues disrupting economic activity and business operations.

Sectoral Challenges and Recommendations – Oil Sector

The oil sector faces significant problems, including extensive pipeline vandalism, high production costs with a 40% premium above other jurisdictions, and production levels at 1.4 million barrels per day (mbpd), below the budgeted 1.78 mbpd.

These issues strain the country’s fiscal position and necessitate continued government support for downstream consumption. ASAP recommends the immediate implementation of presidential directives, such as removing signature bonuses to attract investments and achieve Final Investment Decisions (FID) for key projects by 2024 and beyond.

Business Support

Businesses are struggling with high inflation, elevated costs of raw materials, high interest rates, reduced consumer purchasing power, foreign exchange volatility, and limited access to finance. To address these challenges ASAP proposes a N1 trillion stabilization fund for light and heavy manufacturing to ease asset utilization gaps and inventory refinancing.

Additionally, a value chain financing fund of N200 billion is recommended, offering lower interest rates and short-term financing for MSMEs in sectors like food processing, pharmaceuticals, agriculture, and wholesale and retail trade.

The plan also prescribes the accelerated disbursement of the N200 billion Intervention fund (N75 billion for manufacturing and N125 billion for MSMEs) announced in 2023.

Macroeconomic Strategies

Mr. Edun is expected to provide advice on the macro-fiscal position of the plan, considering options such as prioritizing initiatives to reduce supplementary budget requirements, pursuing a supplementary budget as a partial funding source, reallocating the current budget, and selling government assets, although the latter would have a time lag.

President Bola Tinubu is expected to sign an Executive Order on ASAP after thorough consultations and fine-tuning of the draft presented by the Minister. This executive action aims to ensure the effective implementation of the plan, addressing the critical economic challenges facing Nigeria and paving the way for sustainable development.

This development was propelled by growing concerns over Nigeria’s economic stability, with high inflation and interest rates posing significant challenges to businesses and consumers.