The Sad Reality of The N30,000 Minimum Wage

The Sad Reality of The N30,000 Minimum Wage

It was jubilation in Kaduna among workers. The Kaduna State Government has become the first state in Nigeria to implement the newly approved minimum wage. The hard won battle has been facing implementation hurdles in the 36 states, until Kaduna set the pace.

Minimum wage in Nigeria has been a mockery of livelihood:Minimum wage in Nigeria has been a mockery of livelihood: a life support system that has yielded economic hardship and income inequality.

The battle to increase the minimum wage from N18, 000 to N30, 000 took so long. And the hope of its implementation by states hangs on uncertainty. The governors had vehemently opposed the increment, stating that they can’t afford it. A true statement evident in their inability to pay N18, 000 wages.

So you know why it’s a cause for jubilation in Kaduna that the State Government has announced its decision to pay workers N30, 000, about $80 monthly. But while the people of Kaduna are rejoicing, workers in other states are salivating in hope. But if at all there is such a hope, it’s going to take a long while.

In 2017, the Federal Government (FG) provided extra-statutory bailout fund to states to the tune of N614 billion, due to the states’ inability to pay workers for long. To recover the loan as it was deemed, the FG adopted a reductionist approach to the states. That means, the fund will be deducted monthly from their Federation Account Allocation Committee (FAAC), quota.

The deduction has started, and some states are kicking that they have little left at their coffers after the deductions. According to the data published by the Nigerian Bureau of statistics (NBS), the deduction rate is so high for some states that they may not afford to pay salaries even at N18, 000.

The August deduction report is as follows:

  • Osun: 54%
  • Cross River: 30%
  • Lagos: 29%
  • Ogun: 26%
  • Zamfara: 22%
  • Plateau: 19%
  • Bauchi: 19%
  • Gombe: 18%
  • Imo: 16%
  • Oyo: 15%
  • Ekiti: 15%
  • Ondo: 13%
  • Kwara: 12%
  • Abia: 12%
  • Kogi: 11%
  • Niger: 11%
  • Edo: 10%
  • Adamawa: 10%

The rest of the states are hanging between 9 and 3 percent. However, it is not a good news to the hope of N30, 000 minimum wage. Some states like Kogi, are still borrowing from the FG to pay workers their N18, 000 salaries. In Abia State, the hope is so thin. Workers and pensioners are wailing in starvation.

So it certainly appears that states governments are sitting on a cliff of financial doom, and workers will continue to take the fall. Most of the states are heavily in debt and have little or no means of revenue generation apart from the FAAC. And the oil downturn has depleted the volume of their respective allocations.

Therefore, the option is to wait on the FAAC and choose what to do with it from the list of “most important” which wages is evidently not on. And you don’t talk about infrastructure yet it is reserved for the days of oil boom.

So the N30, 000 minimum wage remains a dream that may never come true in most states of Nigeria, because the reality depends on high oil prices.

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