The Abia State Government has joined the growing list of states that have committed to implementing the new N70,000 minimum wage, set to commence in October 2024.
This move, which was confirmed on Tuesday following a State Executive Council meeting chaired by Governor Alex Otti, is a direct response to the economic challenges faced by workers in the state. The wage increase is intended to cushion the effects of Nigeria’s worsening inflation and economic downturn, which have drastically eroded the purchasing power of workers across the country.
Speaking at a press briefing, the Commissioner for Information, Prince Okey Kanu, emphasized the administration’s commitment to improving the welfare of public sector workers.
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“The state government is committed to the minimum wage, and within the next few days, payment of the new minimum wage will commence,” Kanu stated.
He also hinted that the N70,000 wage floor might only be the beginning, as Governor Otti is prepared to go beyond the national standard if necessary: “If the governor wants to deviate from the national standard and pay higher, so be it,” he said.
However, Representatives of labor unions, including the Nigeria Labour Congress (NLC), Trade Union Congress (TUC), and Joint Negotiating Council (JNC), have raised concerns over what they refer to as “consequential adjustments” that must accompany the new wage policy. They argue that the wage increase should not only apply to entry-level workers but should also reflect across all pay grades to ensure that senior workers are fairly compensated.
Ogbonnaya Okoro, Chairman of the NLC in Abia State, addressed these concerns during a press conference following a meeting with the state government on Wednesday.
“The N70,000 is a law, and that is for Level 1, Step 1, and it is sacrosanct. You don’t touch or go below it; instead, you increase it. When we talk about consequential adjustment, it concerns people from Grade Level 1, 2, up to Grade 17, and so forth. There are percentages involved in working out these modalities for everyone,” Okoro explained.
The union leader revealed that labor had already submitted a template outlining the necessary adjustments for workers across all pay levels. However, he expressed frustration that the government had not provided its own template, which is required to facilitate negotiations.
“We asked the government side to produce their template since organized Labour has submitted its own so that the consequential adjustment negotiating team will bring theirs, and the government will bring theirs, and we will disagree to agree,” Okoro said.
The New Wage, A Response to Economic Hardship
Abia’s decision to increase the minimum wage mirrors the steps taken by only a handful of Nigerian states so far, aimed at relieving the financial pressures on workers amid soaring inflation and the overall economic downturn. Since the removal of fuel subsidies in May 2023, Nigeria has seen a significant rise in the cost of living, with inflation rates remaining stubbornly high. This has severely squeezed the spending power of workers, making it increasingly difficult for them to meet their basic needs.
While the new national minimum wage is set at N70,000, some states have chosen to exceed this benchmark to help workers cope. For instance, Rivers State recently raised its minimum wage to N75,000, while Cross River and Lagos increased theirs to N80,000 and N85,000 respectively.
However, many other states have been slow to act, citing revenue shortfalls, high levels of debt, and other financial constraints. This has left workers in many states struggling to keep up with skyrocketing costs, particularly for basic needs like food, transportation, and housing.
Nigeria’s public finances have been severely strained in recent years due to declining oil revenues, high levels of debt, and growing expenditure demands, which have left many states unable to balance their budgets, let alone meet new wage obligations.
Otti’s decision to push ahead with the new minimum wage comes against the backdrop of a state facing its own fiscal challenges, which has forced it to borrow to finance its projects. Like many other states, Abia has struggled with revenue shortfalls and inherited debts from previous administrations, which have made it difficult to meet existing financial commitments. Yet, Otti’s administration has made improving worker welfare a priority, starting with clearing pension arrears and addressing other legacy financial obligations.