After hours of discussion yesterday, the federal government and labor unions couldn’t agree on the new national minimum wage.

Minimum Wage talks with FG
Minimum Wage talks with FG

The federal government raised its offer from N60,000 to N62,000, while labor unions reduced their demand from N494,000 to N250,000.

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The committee set up to decide on a fair wage reviewed the current national minimum wage using various social, economic, and political factors, as well as international standards. They agreed that the minimum wage should be increased and recommended N62,000 per month to President Bola Tinubu. Labor unions, however, insisted on N250,000 per month.

The committee suggested N62,000 per month as agreed by the government and the private sector, with labor unions proposing N250,000 per month. This recommendation will be forwarded to President Tinubu for further action. The President of the Trade Union Congress, Festus Osifo, emphasized that wages should match the economic realities and living costs.

Negotiations began when President Tinubu directed the finance minister to propose a new minimum wage, which was presented to labor leaders. Initially, the government proposed N48,000 and then N54,000, but labor’s demand remained high.

The Nigeria Labour Congress and Trade Union Congress had reduced their demand to N494,000 before walking out of negotiations, citing the government’s offers as insufficient. Governors warned that a N60,000 wage would strain state finances, leaving no funds for development projects and basic services.

The governors stressed that any new wage should be realistic and sustainable, noting that many states would struggle to pay N60,000 without cutting essential services. Some states might even need to borrow money to pay workers.

Despite opposition from governors and the private sector, a government negotiator said the federal government was willing to consider a wage higher than N60,000. The government reiterated its commitment to finding a quick and fair resolution.

Labor unions are pushing for a wage review based on the 2019 National Minimum Wage Act, which requires periodic reviews. The last revision set the wage at N30,000 in 2019.

In January 2024, President Tinubu appointed a panel to recommend a new minimum wage, including representatives from various sectors and regions. This comes amid economic challenges such as inflation, increased cost of living, and higher fuel prices, which have affected purchasing power and increased poverty.

State governments are concerned about their ability to fund wage increases, arguing that wage adjustments should reflect economic conditions at the state level. Labor unions argue that the rising cost of living justifies higher wages.

Some states are unable to pay the proposed N60,000 wage due to their financial constraints. For example, Zamfara State has a significant deficit, with its revenue far below its expenditure. Other states facing similar issues include Abia, Ekiti, Gombe, Imo, Katsina, Kogi, Oyo, Plateau, Sokoto, Yobe, and Zamfara.