On Friday, the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) declared an indefinite nationwide strike starting Monday, June 3rd, 2024, due to the failure of the tripartite committee to agree on a new minimum wage for Nigerian workers.
This decision, announced by Festus Osifo, the President of TUC, during a joint press conference with NLC leadership in Abuja, follows an ultimatum given to the Federal Government to conclude negotiations by the end of May.
The federal government had proposed a new minimum wage of N60,000, but this was rejected by organized labour, which demanded a minimum wage of N494,000. Osifo stated that industrial action was necessary due to the government’s failure to address the workers’ demands, including the reversal of the electricity tariff hike and the cessation of consumer categorization into bands.
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“In light of this persistent inaction, we, the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), hereby issue a notice of commencement of an indefinite nationwide strike to the Federal Government,” Osifo stated.
Government’s Appeal
In response, the Minister of State for Labour and Employment, Mrs. Nkeiruka Onyejeocha, appealed to organized labour to be considerate, citing the ongoing recovery of the nation’s economy from the effects of the pandemic and other economic challenges.
She stressed that the government was committed to ensuring a fair wage for Nigerian workers but also had to consider the broader economic implications.
“We appeal to organised labour and indeed, other relevant stakeholders to be considerate and patriotic in their demands, recognizing that our economy is still recovering from the devastating effects of the pandemic and other global economic shocks,” Onyejeocha said.
Despite the government’s appeal, various labour unions have begun mobilizing their members for the strike. The Judiciary Staff Union of Nigeria (JUSUN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) are among the unions that have issued directives to their members to prepare for industrial action.
NUPENG’s participation is particularly significant as it involves the shutdown of operations in the distribution and marketing of petroleum products, potentially leading to fuel shortages.
Background to the New Minimum Wage Negotiations
The ongoing dispute over the national minimum wage has a protracted history. In 2019, former President Muhammadu Buhari approved a minimum wage of N30,000. Recently, discussions resumed between the federal and state governments, organized labour, and the private sector, with the NLC and TUC initially proposing N615,500 as the minimum wage, citing the high cost of living.
The federal government’s subsequent offers of N48,000, N54,000, and finally N60,000 were all rejected by labour unions as insufficient. The proposed N494,000 minimum wage from organized labour, the government argues, would result in an unsustainable N9.5 trillion annual bill, a 1,547% increase on the current wage bill.
Minister of Information Mohammed Idris highlighted that while the government aims to ensure adequate remuneration for workers, it also must consider the economic stability of the country. He pointed out that the proposed wage by organized labour could lead to massive job losses, particularly in the private sector.
“The federal government’s new minimum wage proposal amounts to a 100% increase on the existing minimum wage,” Idris stated. “Labour, however, wanted N494,000, which would increase by 1,547% on the existing wage. The sum of N494,000 national minimum wage which labour is seeking would cumulatively amount to the sum N9.5 trillion bill to the Federal Government of Nigeria.”
Interestingly, the organized private sector has shown agreement with the government’s proposal of N60,000 as the new minimum wage. Segun Ajayi-Kadri, Director General of the Manufacturing Association of Nigeria (MAN), mentioned that ongoing negotiations were more focused on establishing a sustainable minimum wage rather than a living wage.
Tinubu’s Economic Policies, the Genesis of the Wage Increase Demand
The push for a substantial increase in the minimum wage by organized labour is significantly influenced by the economic policies implemented under President Bola Tinubu’s administration. Two major policy shifts have had profound impacts on the cost of living: the removal of the fuel subsidy and the floating of the forex market.
The removal of the fuel subsidy, a long-standing practice in Nigeria, has led to a sharp increase in fuel prices. While the subsidy kept fuel prices artificially low, its removal has exposed consumers to the full cost of fuel, leading to increased transportation costs and, consequently, higher prices for goods and services across the board.
This policy was intended to reduce government expenditure and redirect funds to other sectors, but it has significantly burdened Nigerian workers, who now face higher living costs without a corresponding increase in wages.
The decision to float the forex market aimed to stabilize the naira by allowing market forces to determine its value. However, this policy has led to a depreciation of the naira, increasing the cost of imported goods and services. For a country heavily reliant on imports, this has resulted in a surge in inflation, affecting everything from food prices to the cost of electronics and other consumer goods.
The increased cost of living has made it challenging for workers to maintain their standard of living, fueling the demand for a higher minimum wage.
Organized labour’s demand for a minimum wage of N494,000 is a direct response to these economic pressures. The unions argue that the current wage structure is no longer tenable in the face of escalating living costs. The proposed wage is seen as a necessary adjustment to ensure that workers can meet their basic needs and maintain a reasonable quality of life.
The NLC and TUC argue that the removal of the fuel subsidy and the floating of the forex market have disproportionately affected low- and middle-income workers. They contend that the government must take immediate steps to mitigate these impacts by implementing a new minimum wage that reflects the current economic realities.
“We reiterate that since the National Minimum Wage negotiation exercise has not been concluded and the agreed wage passed into law; the hike in electricity tariff has not been reversed and the categorization of consumers into Bands has not stopped as demanded; Nigerian workers are compelled by these failures to embark on an indefinite nationwide industrial action beginning on Monday, the 3rd of June, 2024 to press home our demands,” Osifo stated.