President Bola Tinubu has signed the Minimum Wage Bill into law, bringing an end to protracted negotiations and setting a new national minimum wage at N70,000. This landmark decision, finalized at the State House in Abuja on Monday, follows the National Assembly’s swift passage of the Minimum Wage Act, 2019, just days earlier.
The event was marked by the presence of a National Assembly delegation led by Senate President Godswill Akpabio and members of the House of Representatives, underscoring the significance of this legislative milestone.
The new law represents a substantial increase from the previous N30,000 minimum wage and is seen as a critical response to the economic pressures faced by Nigerian workers.
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Following the signing, Basheer Lado, the Special Adviser to the President on Senate Matters, hailed the move as a fulfillment of President Tinubu’s campaign promise.
“The signing of the minimum wage bill into law by His Excellency, President Bola Ahmed Tinubu, is both a promise kept and a demonstration of his people-centric governance model,” Lado stated.
He added that Tinubu had committed to paying a living wage during his election campaign, and this new law is a testament to that pledge.
The road to this historic wage increase was fraught with intense negotiations and considerable debate. Labor unions, galvanized by the skyrocketing cost of living due to recent economic policies such as the removal of fuel subsidies and the floating of the naira, initially demanded a minimum wage of N494,000. The federal government, however, countered with an offer of N60,000. After numerous rounds of discussions, the unions adjusted their demand to N250,000, while the government proposed N62,000. Finally, both parties agreed on N70,000.
How many states can pay?
However, concern over the ability of states to pay the minimum wage remains. For instance, The Gombe State Governor, Inuwa Yahaya, said Tuesday that his administration cannot pay the new national minimum wage of N70,000.
Yahaya, who chairs the Northern Governors Forum, spoke at a meeting with labor leaders, civil society organizations, and traders associations at the Government House in Gombe, ahead of the planned nationwide protest.
He said Gombe State’s limited allocation from the federation account makes it impossible to implement the increased wage package. This is even though the federal allocation to Gombe and all other states has increased since President Bola Tinubu announced the removal of petrol subsidies.
“I cannot pay the N70,000 minimum wage, and I suspect many other states are in the same predicament,” he said.
He said even the previous minimum wage of N30,000 was a struggle for many state governments to implement.
Governor Yahaya’s apprehensions are not isolated. Other state governors have voiced the same concern, citing the challenge of paying N30,000 minimum wage. This situation raises critical questions about the sustainability and practical implementation of the new minimum wage across all states.
However, the substantial rise in the cost of living, coupled with a soaring inflation rate that reached 34% in June 2024, has exacerbated financial pressures on workers across the states.
President Tinubu, while committed to ensuring a fair wage, has consistently emphasized the need for economic prudence.
“You have to cut your coat according to the available cloth,” Tinubu remarked, advocating for a wage structure that reflects economic realities and fiscal sustainability.
The new law, set to be reviewed every three years, is a bold step towards alleviating the financial burdens on Nigerian workers. However, it also places a significant onus on state governments to find ways to meet these new financial obligations.
Economists believe the broader economic implications of this wage increase, particularly its impact on public sector finances and overall inflation, will need to be carefully managed. To fully implement the new minimum wage, governors have been advised to set their priorities right. Their perceived inability to pay the N70,000 monthly minimum wage has been attributed to wasteful spending. Governor Yahaya is reportedly spending billions of naira on renovations of office and residential buildings.
However, stakeholders have noted that the N70,000 minimum wage is not just a figure; it represents a crucial effort to improve the standard of living for millions of Nigerian workers amidst challenging economic conditions. They also noted that the journey ahead will require diligent effort and cooperation to transform this legislative victory into tangible benefits for the Nigerian workforce.