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 Governors and the minimum wage

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PostSubject: Governors and the minimum wage   2015-12-02, 12:50

The Nigeria Governors Forum recently expressed worries that more states
may not be able to pay workers salaries if the revenue of the country
continues to be on the decline. The NGF, through its chairman, Governor
Abdul’aziz Yari of Zamfara, said “the situation is no longer the same when
we use to pay N18, 000 minimum wage when oil was 126 dollars; now oil
price is 41 dollars.”
The governors also committed to diversifying the nation’s economic base, a
cardinal objective of the President Muhammadu Buhari’s administration. In
the words of the Governors Forum chair after their meeting: “We will
diversify our economy in the area of agriculture and mining. But at the same
time, we should understand our situation where some of us (states) today
are taking N100 million take home (monthly allocation) and then have
salaries in particular of over N2 billion to pay.”
These commentary from the governors have thrown up many issues which
many Nigerians have been raising for several decades and have gone
unheeded or immaturely politicised. Some even viewed very positive
agitations with sedentary ethnic prism. What the comments from the
governors forum meant is that most of the governors, particularly the
second termers (who should know better) do not have any agenda for
development of their states. It also means that the governors have based
their campaign promises and development agenda solely on oil revenue.
Shockingly to many Nigerians, oil revenue did not crash over night and it is
a common knowledge that oil resource from elementary economics
knowledge is open to volatility. Minimum wage of N18,000 paid to Nigerian
workers was not agreed to when oil price was $126 per barrel. In fact,
the national minimum wage came into existence after almost two years of
agitation and eventual negotiation by the tripartite of government
(represented by the federal and state governments), the Nigeria Employers
Consultative Association, NECA, representing other employers (in the private
sector) and organised Labour. This was in 2011 and at that time, the price
of Nigerian crude averaged $100 and not $126 as claimed by the
governors.
Secondly, Nigerians opposed to the creation of more states have always
argued that existing states were not viable as most of them were
depending on oil revenue for their survival and most opposing voices to
the clamour for new states were actually canvassing for the abolition
of states and return to regional governments and resource control as it
were in pre-independence Nigeria and early years of post-independence. But
little minds, who always do not see beyond the now or their nostrils were
always shouting them down and having their way in the National Assembly.
But today, we are face to face with the reality of what people have been
talking about.
To make matters worse, analysts have predicted that with the alignment
and realignment of global forces in the Middle East and countries like Iraq
and Iran, as well as the US pumping their oil into the international
market, the price of crude could crash to as low as $20 per barrel. Where
does this leave Nigeria?
Now, on assumption of office the Buhari administration announced a bail
out to governors who were owing their workers several months of unpaid
salaries. Most of them who applied have received the facility vide the CBN
and it is said to be a long term concessionary facility to the benefiting
states. Twenty seven states went for the bail out.
Take away oil revenue, apart from Lagos and Edo which are serious about
the collection of Internally Generated Revenue, IGR, all others may close
shop or be declared bankrupt soon, if oil price gets down to its knees any
time from now.
The governors who have received bailout funds, instead of wearing their
thinking caps as the governors of Edo and Lagos have done, are planning
to go cap in hand again to meet the cash cow(Federal Government) to
discuss how they would survive. This is an unbelievably naive action to
take! They just need to go back to where we are coming from before the
petro-dollar era. Foresighted governors such as Comrade Adams Oshiomhole
and then Fashola of Lagos, now Ambode, had seen the need, long ago, to
look beyond oil. This explains why when other governors are weeping like
Sam Mbakwe of old Imo State, unable to pay salaries of their workers for
months, Oshiomhole and Ambode are not only paying as and when due,
but are still embarking on massive development projects.
Why should the governors go and meet Buhari again? For what? The
governors need now to face the reality squarely. They need , on their own,
to go back to the drawing board or ask their colleagues in Edo and Lagos to
teach them how to raise money internally without having to wait for oil
revenue given the challenge thrown up by oil. There is need for the
governors to be more serious than ever in collecting their taxes. States like
Rivers of Amaechi of old came up with a Compulsory Saving Law which
provides for the future when the oil money dries up. They were saving
N1billion every month. Governor Wike should now use the savings that
accrued to that policy to diversify the revenue base of Rivers by creating the
enabling environment for industries to thrive and then he goes ahead to
collect taxes to pay workers salaries and finance capital development. Other
states need to also look inwards and create the environment for the
development of their agricultural and mining sectors and go ahead to collect
taxes without looking at faces. It cannot be a paddy, paddy thing
anymore.Also, the governors should not contemplate sacking civil servants
in the employment of their states because I believe strongly that labour
creates wealth. Government would need all the workers one way or the other
but need to create the right environment for businesses to thrive in their
various states as quickly as possible. Electricity must be fixed, water must
flow, roads must be provided, including feeder roads to farming
communities, storage facilities must be functioning. The loans most state
governors have rushed to collect must not be squandered in frivolities but
meticulously channeled to creation of enabling environment for peace and
business to flourish.
I am sure these are the thoughts of Leaders of the Nigeria Labour
Congress, NLC, who in reaction to the governors’ threat to cut salaries or
downsize work force warned that they would see such moves as an open
declaration of war against the Nigerian workers.
Governors need to also cut down on the cost of governance. The
hundreds of billions of Naira public office holders continue to fritter away in
the name of governance is in itself what is unsustainable.
In fact, their Congress equally told President Muhammadu Buhari to prepare
to receive the proposal for the review of the minimum wage as contained in
the agreement, noting that the proposal was delayed because the NLC
wanted to give the government time to settle down before coming up with
their demand. In my considered view, the NLC is in order.
Going forward, the governors should hearken to the lone voice in the
wilderness of their Delta colleague, Ifeanyi Okowa who believes that it is
the same situation with the Federal Government.
The Federal Government is already pointing the way, toeing the path of the
Edo State and Lagos States Governments by the recent imposition of
N2.1 trillion fine on MTN for violating the NCC regulations. Also Guinness
Nigeria Plc was fined N1billion for violating the business laws in Nigeria.
These are clear ways to rise above dependence on oil revenue.
The Governors need to also cut down on the cost of governance. The
hundreds of billions of Naira public office holders continue to fritter away in
the name of governance is in itself what is unsustainable. The issue of
security votes of the weeping governors, their official or hired aircrafts and
helicopters which they maintain at huge costs to the states purse, frequent
overseas shuttles and many others have to be abolished. The size of
political appointees and ministries have to be reduced a la federal
government. This would prove to the Nigerian public that they are ready and
willing to tackle the challenge posed by dwindling oil revenue head on.
Dan Owegie, a chieftain of the APC, wrote from Benin City, Edo State.
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