N30,000 minimum wage: States strategise

N30,000 minimum wage: States return to drawing board


by Bisi Oladele, Ibadan; Adekunle Jimoh, Ilorin; Nicholas Kalu, Calabar; Okodili Ndidi,Owerri; Justina Asishana, Minna; Sunny Nwankwo,Aba  
State governments across the country are taking a fresh look at their finances with a view to mapping out strategies for payment of the new N30,000 minimum wage.

They are also awaiting guidelines from the National Salaries, Income and Wages Commission on how best to handle the situation.

Although some of the states, including Kano, Zamfara, Kwara, Rivers, Kogi and Edo, had expressed their readiness to pay the new minimum wage, there seems to be discordant tunes from some other states about their ability to pay.

One of such states is Oyo where the current monthly wage bill stands at N5.6 billion.

The state is allocated an average of N4.4 billion a month from the federal purse while its internally generated revenue is about N1.6 billion monthly.

Information, Culture and Tourism Commissioner, Toye Arulogun, could not tell what the wage bill would look like when details of the new minimum wage are released.

He said that could only be determined when the Federal Government gazettes the new minimum wage and guidelines are out.

The commissioner explained that the government would take the necessary step if it was confronted with inability to pay.

But he was quick to add: “We will wait to cross the bridge before deciding the appropriate line of action.”

The Kwara State Government is also awaiting the template for payment from the National Salaries, Income and Wages Commission.

It says the template is required by the 13-man minimum wage reviewing committee it set up to guide it on computing new salaries for workers.

Investigations revealed that the state government receives between N2.5 and N3.8 billion monthly, going by the figure usually released by the Joint Allocation Account Committee (JAAC).

The internally generated revenue of the state also stands at between N1.7 billion and N2.3 billion per month.

The Chairman of Kwara State Internal Revenue Service (KWIRS), Prof Muritala

Awodun, recently said that the service generated a total sum of N6.279 billion as revenue in the first quarter of 2019.

Awodun, said that the agency generated N2.16 billion in January, N1.76 billion in February and N2.38 billion in March 2019.

The KWIRS boss, who said that the revenue agency was yet to achieve its target of N60 billion revenue per annum or N5 billion monthly, however, said that the service has been developed to a point that it would not make less than an average of N2.5 billion every month.

It was gathered that the state government currently spends over N2 billion on the payment of workers’ salaries.

A source gave the breakdown of salary payment as follows: core civil servants N600 million; primary and secondary school teachers N940 million; local government staff N500 million and pensioners N400 million.

Like Oyo and Kwara, Cross River State is also waiting for the guidelines from the federal authorities.

It currently has about 25,000 workers on its payroll and receives an average of N3 billion allocation from Abuja monthly and generates between N1.5 billion and N3.5 billion.

Apart from paying salaries and meeting financial obligations in respect of projects, the state also services the loan taken for the execution of the Tinapa complex.

This is put at almost N100 million per month.

There is also the controversial superhighway expected to gulp over N700 billion.

The governor recently  transmitted a letter to the House of Assembly to approve modalities for funding the project by the state government.

The letter, which was leaked on the Internet, sought approval for an Irrevocable Standing Payment Order (ISPO) for N648.8 billion in favour of a construction company.

The letter with reference number SSG/S/300/VOL.XVII/1199, addressed to the Speaker of the State House of Assembly, sought the state legislature to consider and pass a resolution granting an approval for the state government to issue an ISPO of N300 million monthly through a bank in favour of the construction company.

Imo ’ll pay, says Okorocha

…as gov-elect insists on checking records first

The Chief Press Secretary to outgoing Governor Rochas Okorocha of Imo State, Mr. Sam Onwuemeodo, told The Nation that the state government would pay the new minimum wage.

He said: “Imo State was the first state to pay the N18,000 minimum wage and it will also pay the new minimum wage of N30,000.

“The governor has always considered the welfare of workers a top priority of his administration.”

But Mr. Chibuike Onyeukwu,  the media aide to Governor-elect Emeka Ihedioha, said the records would have to be checked first to determine what could be done.

He said: “The issue of the minimum wage is a matter the governor-elect will not comment on until he is sworn in and assumes office on May 29.

“Thereafter, he will check the records on ground and make the position of the state known.”

Investigation showed that the current monthly wage bill of workers in the state is about N4 billion, pensions gulp  N1.4 billion, while internally generated revenue (IGR) is N1.4 billion per annum.

The state also gets between N3.4 billion and N5 billion as allocation from Abuja monthly.

Speaking on the state’s chances of paying the new minimum wage, the Commissioner for Budget and Planning, Iyke Njoku, described it as a complicated issue.

He said: “With the signing of the new minimum wage bill into law, every state is expected to pay. For it to be obtainable, the Federal Government should have made it optional rather than foisting it on the states.

“States should have been allowed to negotiate with the workers and agree on what they can pay.

“For instance, in Imo State, we have free education going on, and this is taking a lot of money and we cannot stop that to meet up with the new salary because they will bring back hardship on the people.

“And if you fail to comply with the new salary structure, labour will revolt. So it is a very complicated issue for now.”

Niger to initiate discussion with labour

Governor Abubakar Sani Bello is seeking talks with labour leaders in the state on how to proceed with payment of the new minimum wage.

He wants to find out why government’s wage bill has remained unchanged despite the large number of those who have either retired from the service or died since 2015 when he assumed office.

Bello said that while he is committed to paying the new minimum wage, “we will initiate discussions with the organised labour on how to proceed with the necessary modalities for the full implementation of the 30,000 minimum wage bill as signed into law by the President.”

He said it was ”disheartening that despite conscious efforts to turn around the fortunes of the state, the state wage bill continues to remain static, regardless of the number of the people that have retired from the service and those who died between 2015 and now.

“The civil servants need to be sincere with themselves and support government in changing the ugly trend.”

The federal allocation to Niger State in January 2019 was N4.043 billion.

Figures recently released by the National Bureau of Statistics (NBS) put the state’s IGR last year at N6.5 billion per annum, an average of N543 million per month.

Abia ready to pay, says commissioner

The Abia State Commissioner for Finance, Mr. Obinna Oriaku, told The Nation that the state government was ready to pay the new minimum wage, saying it “will also give us the opportunity to recalibrate our wage structure to be on the same page with other states.”

Asked whether the state has the financial muscle to pay, he said: “Our IGR is not static; it fluctuates. In my time, it has gone beyond N1 billion, and at times, it has fallen below N700 million.

“It keeps fluctuating, but we have arrived at a point where I think today, we can target N2 billion as IGR in Abia and achieve it.

“Ultimately, people believe that Abia can make N5 billion as IGR, and I share that optimism. But that hasn’t happened yet.

“Minimum wage is something that we have all agreed that the amount currently being earned by workers is low, and as a state, we are going to abide with the decision, in line with other states. Whatever other states are doing, be rest assured that we are going to do it.

“But I am not also worried, because if you check the whole of Southeast today, Abia pays the highest. N30,000 minimum wage will also give us the opportunity to recalibrate our wage structure to be at the same page with other states.”

On the possibility of the wage bill being a burden on the state, the commissioner said: “There is no doubt that it is going to be a big burden on the state.

“But why I am not a bit bothered like other states is because Abia has been paying well above the N18, 000 minimum wage since 2011 till date.

“So, we are not as jittery as other states. But like I told you, this has also provided a very good platform for us to look at our wage structure, knowing that we pay the highest.

“We have the capacity to continue paying highest. We are going to use this opportunity and adjust and then make it easier for us to pay and for the workers to earn this money as and when due.

“It is going to be a win-win situation for everybody. The workers will be happy and the state will also be happy.

“I know that when we came in and did the biometrics and the new payroll administration strategy where we have centralized payroll system, that assisted us in realigning our wage structure and we made huge savings from that exercise.

“This exercise was basically for the MDAs, but the minimum wage now is going to give us the opportunity to look at what is being earned even in other parastatals like Abia Poly where the wage structure is dysfunctional because a PhD holder in Abia Poly earns higher than a professor in ABSU (Abia State University, Uturu).

“It is absurd and totally unacceptable. So, be rest assured that with the restructuring that we are trying to do, it will realign these things and make it look like what it should be, so that the state will be alive to its responsibility, these institutions will also be alive and running.

“We are going to restructure our salary wage bill to be in line with what is obtainable elsewhere.

“Concerning our Internally Generated Revenue (IGR), we are currently undergoing restructuring. During the period of restructuring, you don’t get that kind of quantum leap that you expect, but any moment from now, we will start reaping the dividends of those things”.

Credit: The Nation

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