Workers Day: Governor Obaseki Increases Minimum Wage to N40,000 for Edo Workers

To mark 2022 Workers’ Day, the governor of Edo State Godwin Obaseki, has increased the minimum wage for workers in the state from the N30,000 ($72) federal government-approved minimum wage to N40,000.

The surprising decision was announced by the governor during the commemoration of Workers’ Day in Benin, the State’s capital, disrupting the norm and setting the pace for other states amid rocketing cost of living in Nigeria.

Obaseki said his government will continue to prioritize the welfare of Edo workers, equipping them with the capacity and environment to deliver efficient and quality service to the people.

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I announced that we have reviewed the minimum wage for Edo workers from N30,000 to N40,000 a month. Although we would have loved to pay more, we hope that this little adjustment will enable us to cushion the impact of the inflation that we are faced with. pic.twitter.com/6KGVjpcXjX

— Godwin Obaseki (GGO) (@GovernorObaseki) May 1, 2022

“As we all know, the minimum wage of N30,000 can barely sustain a family. It will be immoral and mindless of us to continue to pretend that we do not know that our workers are suffering.

“The government of Edo has now decided to review the minimum for Edo workers from N30,000 to N40,000 a month. Undoubtedly, Edo is the first state since the current outbreak of coronavirus to take this initiative.

“Even though we would have loved to pay more, we hope that this little adjustment would enable us to cushion the impact of the inflation that we are faced with. There is no doubt that the financial implications will be heavy and put another burden on the government.

“But as a government, we are prepared to make the sacrifices so that the workers can live a better life. Your welfare is our number one priority,” he said.

Besides the minimum wage, Obaseki spoke on another issue that has become a menace – the plight of pensioners. He decried the height of hardship senior citizens have been subjected to by many states owing pension while pledging his support for them.

The governor noted that the cost of living has skyrocketed, subjecting pensioners to further hardship and announced that he has approved, effective this May, the agreement the State  reached with the Union of Pensioners that the harmonized amount would be paid from May 2022.

“I am particularly interested in our senior citizens because they are one of the most vulnerable in our society. We took interest in payments of outstanding pensions to our pensioners although these pensions were held by the previous administration.

“In view of the prevailing economic circumstances, I have now approved, effective this May, the agreement we reached with the Union of Pensioners that the harmonized amount would be paid from May 2022.

“Government is aware of the difficulties faced by the pensioners due to the non-payment of pension and gratuities to pensioners by previous governments. This responsibility is huge, and it will require a substantial part of our resources to settle them.

“However, we are not a government that is known for running away from challenges; we will look for a way to tackle these challenges,” the governor added.

This development has stirred a new challenge for many states in Nigeria that have been finding it hard to implement the N30,000 minimum wage and to pay pensioners in a backdrop attributed to massive revenue drop.

Seven states; Zamfara, Taraba, Benue, Kogi, Cross River, Abia and Imo, are yet to implement the minimum wage which was signed into law in 2019, by President Muhammadu Buhari, as a way to cushion the effect of petroleum pump price hike. These states sticking to the former minimum wage means that their workers go home with a monthly stipend of N18,000 ($44), which compared to the current cost of basic necessities in Nigeria, is a mockery to workers’ plight.

Nigerian states depend largely on their monthly federal allocations (FAAC) to survive. Apart from Lagos, no other state in Nigeria generates enough revenue to sustain itself. This means, as the federal government’s struggles with revenue decline due to the drop in oil prices and covid-induced economic headwinds, many states are barely surviving – making it difficult for the governors to pay workers N30,000 monthly.

Edo State’s decision to move a little above the minimum wage was apparently inspired by the increase in its revenue generation. The Edo State Internal Revenue Service (EIRS) said last year the state’s monthly Internally Generated Revenue (IGR) now stands at N2. 8billion as of the first quarter of 2021 compared to N1. 6billion in 2017. The government said it has the capacity to generate more by increasing the number of taxpayers in the state. Edo State ranks second behind Lagos State in total number of taxpayers with TIN (tax identification number).

Some experts have fingered meager disposal income as the bane of economic development in Nigeria. With N30,000 monthly pay, most workers in Nigeria , who can’t afford their basic needs have sunk deep into multidimensional poverty. This means also that many small scale businesses that rely largely on the patronage of these workers will share their fate.

With most states in Nigeria yet to figure out a way to generate enough revenue to minimize their dependence on federal allocation, the implementation of livable minimum wage will remain one of the most controversial issues in the country.