The much-anticipated implementation of Nigeria’s new minimum wage, initially scheduled to cushion the economic shocks following the removal of fuel subsidies and the floating of the foreign exchange market, has faced another delay. The Committee on Consequential Adjustments in Salaries for civil servants has now agreed to push the effective date to July 29, 2024, after the government missed the earlier deadline of May 1, 2024.
According to the Memorandum of Understanding (MoU) issued at the end of the committee’s meeting in Abuja last Friday, the wage increase, which was meant to soften the blow from rising inflation, was supposed to have been rolled out as early as April 2024. That date marked the expiration of the previous N30,000 minimum wage, a figure long outpaced by Nigeria’s economic realities.
The new minimum wage of N70,000, as outlined in the National Minimum Wage Act 2024, was intended as a critical measure to provide relief from the escalating cost of living. The removal of fuel subsidies in 2023 led to a spike in fuel prices, which further increased transportation costs, while the floating of the foreign exchange (FX) market caused rapid depreciation of the naira. Together, these factors created widespread economic hardship for Nigerians, who have seen a steep rise in the prices of essential goods and services. In this context, the new wage was supposed to act as a buffer to prevent the erosion of real incomes.
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Yet, five months after the initial deadline, the federal government, still, has not implemented the new wage.
The introduction of a wage award to offer some interim relief has also fallen short. Reports indicate that many civil servants did not receive the wage award for the six-month period from October 2023 to February 2024. This has led to skepticism among workers about the government’s sincerity in following through on its promise to extend the award payments until July 2024.
The committee, headed by the Head of Civil Service of the Federation, Didi Walson-Jack, is tasked with working out the finer details of the new minimum wage rollout. Other key members include Benjamin Anthony, chairman of the public service negotiating team of organized labor, and Ekpo Nta, executive vice chairman of the National Salaries, Incomes, and Wages Commission (NSIWC). In the MoU, the committee recommended that the NSIWC should develop the necessary salary templates for other consolidated salary structures to ensure that the wage adjustment is implemented correctly.
However, the uncertainty surrounding the actual implementation remains a major concern. Even with the July 29, 2024, date set, there is no guarantee that the new wage will come into effect. A growing number of state governments have already voiced concerns over their ability to pay the N70,000 wage due to strained financial resources.
The potential for non-compliance among states is high, as many are struggling to meet existing salary obligations under the current N30,000 minimum wage. Several state governments have openly expressed that the financial burden of the new wage, coupled with other economic challenges, is simply too much to bear without federal assistance.
This gap between federal and state capacity has further deepened fears that civil servants across various states may face delays or outright refusal of the wage hike, even if the federal government manages to implement it for its employees. Without concrete financial support, states may continue to push back on the wage increase, forcing workers to wait even longer.
The delay comes against the backdrop of dwindling spending power buoyed by soaring inflation. Economists have argued that without the timely implementation of the wage increase, the gap between wages and living costs will only grow wider, further entrenching poverty among the working population.
The interim wage award, originally introduced to provide immediate relief, was seen as a stopgap measure. But with inconsistent payments, the measure has done little to alleviate the burden for civil servants.
In defense of the delays, the committee, led by Walson-Jack, emphasized that the federal government took into account the broader economic situation before making its decisions.