Why ₦60,000 Minimum Wage Is Too High For States To Pay – Governors

The Nigeria Governors Forum (NGF) has rejected the proposed  ₦60,000 minimum wage for Nigerian workers, stating that it is too high and not sustainable. The NGF expressed concerns that if the proposed minimum wage is adopted, many states would allocate their entire Federal Account Allocation Committee (FAAC) funds to salaries, leaving no resources for development projects.

Halimah Ahmed, the Director of Media and Public Affairs for NGF, in a statement issued on Friday, June 7, 2024, stated that the governors said the proposed minimum wage is too high and not sustainable.

“The Nigeria Governors’ Forum is in agreement that a new minimum wage is due. The Forum also sympathises with labour unions in their push for higher wages. However, the Forum urges all parties to consider the fact that the minimum wage negotiations also involve consequential adjustments across all cadres, including pensioners,” the statement reads in part.

The NGF cautioned that any agreement reached should be sustainable and realistic, stating that the  ₦60,000 minimum wage proposal “will simply mean that many states will spend all their FAAC allocations on just paying salaries with nothing left for development purposes. In fact, a few states will end up borrowing to pay workers every month.”

According to a 2024 report by Punch Newspaper, using data sourced from Open States, a BudgIT-backed website that serves as a repository of government budget data, 24 states in Nigeria cannot pay salaries without Federal allocation.

The Forum appealed to all parties involved, especially labour unions, to consider all socioeconomic variables and reach a sustainable agreement.

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“We appeal that all parties involved, especially the labour unions, consider all the socioeconomic variables and settle for an agreement that is sustainable, durable, and fair to all other segments of the society who have a legitimate claim to public resources,” the statement added.

However, the organised labour groups, including the Trade Union Congress (TUC) and the Nigeria Labour Congress (NLC), have vowed to reject any minimal increase to the ₦60,000 offer proposed by the government on the new minimum wage. President of the TUC, Festus Osifo, reiterated this stance when he appeared on Channels TV shortly after the strike that brought the country to a standstill was called off on Tuesday.

While the Federal Government had assured the labour unions that President Bola Tinubu is committed to a minimum wage higher than the  ₦60,000 previously offered, the governors’ rejection of the proposed minimum wage may throw a wrench in the negotiations.