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Minimum wage: New minimum wage may push states into bankruptcy — NGF report
As the nation awaits the new minimum wage promised to be sent to the National Assembly by President Bola Tinubu, the burden of implementing the minimum wage may make many states bankrupt.
The Federal Executive Council, at its meeting last Tuesday, stepped down a memorandum on the report of the tripartite committee on the new minimum wage, to allow for more consultations among the federal and state governments on one part, the private sector and the labour unions on the other part.
Last Thursday, Tinubu met with the governors at the National Economic Council meeting chaired by Vice President Kashim Shettima. The meeting, which was expected to deliberate on the national minimum wage, was, however, silent on whether or not it considered the issue.
Also last Thursday, the Southern Governors’ Forum released the communiqué of its meeting held in Abeokuta, Ogun State, with the governors asking that each state should negotiate minimum wage with its workforce.
The labour unions have, however, reacted to the stance of the Ni¬geria Governors’ Forum over their overbearing influence on the minimum wage negotia¬tions.
In a document, titled, “Analysis of State FAAC inflows and state expenditure profile,” of the Nigeria Governors’ Forum Secretariat, the NGF report warned that implementing the new minimum wage could push states into bankruptcy due to increased recurrent expenditure.
According to the report, the burden of recurrent expenditure already left Abia, Ekiti, Gombe, Imo, Katsina, Kogi, Oyo, Plateau, Sokoto, Yobe, and Zamfara in deficit in 2022.
The report predicted that if the recurrent expenditure increased by 50 per cent, 13 states would fall into deficit, with only 10 remaining financially stable.
The tripartite committee’s recommendation of a N62,000 minimum wage would necessitate over a 100 per cent increase from the current N30,000, potentially leaving only a few states like Anambra, Bayelsa, Borno, Ebonyi, Gombe, Imo, Jigawa, Kaduna, Lagos, and Rivers with positive net revenues, based on the 2022 fiscal data.
A net revenue is the deduction of recurrent expenditure from the total revenue of the state. When it is positive, it means a surplus, but when negative, there is a deficit.
Also, the total revenue of states is calculated from the monthly revenue from the Federal Account Allocation Committee, internally generated revenue, aids and grants and constituency development funds.
According to the documents, with an employment size of about 58,631 workers, pays N5,837,899,980.40 as wage monthly. Anambra has a 20,541 employment size and pays N1,824,851,308.96 monthly as wages, apart from N894,480,399.62 as pension obligation and N579,694,680.33 for debt servicing.
Bayelsa boasts of 48,213 workforce, paying N5,802,435,178.58 monthly, with N1,194,528,784.40 as pension obligation and N3,535,787,992.48 as debt servicing, totalling N10,532,751,955.46 as total recurrent expenditure monthly.
Benue has about 13,366 workers in its workforce and pays N2,040,184,471.85 as monthly wage, N76,838,634.62 for pension, and N64,685,126,826.08 for debt servicing, totalling N66,802,149,932.56 monthly.
Delta has about 50,871 workers, offering N8,973,081,853.50 as wages, N1,499,886,303.39 as pension, and N72,417,433,139.00 as debt servicing, accumulating to N82,890,401,295.89 in a month.
Jigawa has about 44,831 workers in its employ and pays N2,795,662,113.02 as wages, and N345,987,843.12 as a pension, totalling N3,141,649,956.14 monthly on recurrent expenditure.
Katsina, Kwara and Niger have 19,062, 36,048 and 22,225 workers, with accumulated N139,294,944,565.27, N4,457,268,675.54 and N2,653,614,213.35 monthly recurrent expenditure respectively.
According to the document, Abia has a total recurrent expenditure of N111,983,979,958.62, against a total revenue of N147,637,730,867.73.
For Adamawa, the recurrent expenditure stands at N70,369,399,885.57, against a total revenue of N109,722,949,684.65, while Akwa Ibom boasts of a high revenue of N444,288,683,000, with recurrent expenditure of N235,144,539,000.
Of the states, Lagos has the highest total revenue, amassing N1,243,778,878,170 in 2022, with a recurrent expenditure of N621,043,036,000, followed by Delta, with N702,020,717,460.08 and a recurrent expenditure of N377,905,100,451.83.
Rivers amassed N525,588,159,714.88 in 2022, with recurrent expenditure of N186,974,715,774.87; Kaduna had a total revenue of N222,349,875,000 and expenditure of N95,987,999,472.10; Ogun, N297,249,009,626.83, recurrent expenditure of N178,519,010,628.42 and Oyo, with total revenue of N247,156,776,739.70 and recurrent expenditure of N152,077,804,384.65.
Kebbi State had the lowest total revenue in 2022, raking in N92,132,444,588.16 and spent N57,601,464,374.96 on recurrent expenditure, followed by Taraba, with a total revenue of N101,177,283,069.87 and recurrent expenditure of N75,055,201,412.62.
Aside from FAAC allocation, some states recorded poor IGR in the 2022 data compiled by the NGF Secretariat.
Zamfara State generated N6,513,960,477.20; followed by Kebbi, with N8,630,767,122.96; Taraba, N9,744,331,840.01 and Yobe State, with N9,940,554,642.00.
The IGR of Katsina (N12,821,119,042.64), Adamawa (N13,175,774,969.53), Niger (N14,427,373,136.00), Benue (N15,021,223,729.38), Plateau (N15,927,001,739.90) and Imo (N16,711,346,111.18) also showed a poor revenue standing.
The PUNCH reported on October 19, 2023, that 15 states have yet to implement the N30,000 minimum wage for their workers since it was signed into law in 2019.
According to BudgiT, though the 15 states were yet to implement the minimum wage of N30,000, the 36 states of the federation grew their cumulative personnel cost by 13.44 per cent to N1.75tn in 2022 from N1.54tn in 2021.
The civil society organization, in a release, ‘The States of States Report 2023,’ highlighted that the 36 states of the federation grew their revenue by 28.95 per cent from N5.12tn in 2021 to N6.6tn in 2022.
“Put together, the IGR of the 36 states appreciated by 12.98 per cent from N1.61tn in 2021 to N1.82tn in 2022, denoting a strengthened domestic revenue mobilisation capability.
“Nonetheless, the IGR to GDP ratio remained very low at 1.01 per cent. The increase in IGR did not reflect across the board as 17 states experienced a decline in their IGR from the previous year, while 19 states recorded positive growth,” BudgIT said.
The Assistant General Secretary of the NLC, Chris Onyeka, in an interview with the News Agency of Nigeria on minimum wage and its implementation, claimed that many state governors were flouting the Minimum Wage Act and listed the states of Abia, Enugu, Bayelsa, Delta, Nasarawa, Gombe, Adamawa, Niger, Sokoto, Imo, Anambra, Taraba, Benue, and Zamfara as defaulting.
Reacting, the Enugu State chairman of TUC, Ben Asogwa, said the state commenced payment of N30,000 minimum wage and its consequential adjustment in February 2020 for state government workers, while local government workers and primary school teachers were paid 25 per cent consequential adjustment.
He, however, said Governor Peter Mbah, on assumption of office, approved the full implementation of the N30,000 minimum wage for both the LG workers and primary school teachers in the state.
The Zamfara State Governor, Dauda Lawal, announced during a meeting with the leadership of the labour unions that the state would begin payment of N30,000 minimum wage effective June 2024.
A special panel of the Court of Appeal sitting in Abuja has reserved judgment in five separate appeals arising from the legal disputes surrounding the conduct of the 2024 local government elections in Kano State.
The appeals stem from two rulings delivered by the Federal High Court in Kano, which, among other declarations, nullified the composition of the Kano State Independent Electoral Commission.
The cases include Appeal No. CA/KN/20/2025, filed by KANSIEC with the Independent National Electoral Commission and four others listed as respondents.
Another, CA/KN/233/2024, was filed by the Kano State House of Assembly and another party, with Aminu Aliyu Tiga and 14 others as respondents.
Appeal CA/KN/290/2024 was brought by the Attorney General of Kano State and six others against the All Progressives Congress and three others.
Additionally, Appeal CA/KN/291/2024 was filed by KANSIEC and eight others, with the Kano State House of Assembly and six others listed as respondents.
In the appeal marked CA/KN/233/2024, the Kano State House of Assembly and another appellant, represented by Chief Adegboyega Awomolo (SAN), urged the appellate court to overturn the judgment of the Federal High Court, which had barred KANSIEC from conducting local government elections.
Awomolo argued that the Federal High Court lacked jurisdiction to entertain the case, noting that the suit filed by Aminu Tiga and the APC was statute-barred at the time of filing.
He also contended that the plaintiffs lacked the legal standing to initiate the case.
Justice Simon Amobeda of the Federal High Court had, on October 22, 2024, restrained KANSIEC from conducting elections in the 44 local government areas of Kano State.
The judge ruled that the electoral commission’s members were card-carrying members of the ruling New Nigeria People’s Party, in breach of Sections 197 and 200 of the 1999 Constitution.
Justice Amobeda further directed INEC not to release the national voters’ register for the purpose of the local government elections in the state.
Additionally, he barred the police, the Department of State Services, and other security agencies from providing support or protection for the polls.
Unhappy with the verdict, the Kano State House of Assembly and other affected parties approached the Court of Appeal, arguing that local government election matters are under the exclusive purview of the state and can only be adjudicated by a Kano State High Court—not the Federal High Court.
After hearing all arguments on Tuesday, the three-member appellate panel led by Justice Georgewill Ekanem announced that judgment had been reserved and would be delivered on a date to be communicated to the parties involved.
Workers at the Rufus Giwa Polytechnic, Owo, in Ondo State on Tuesday embarked on an indefinite strike over the non-payment of salaries by the Ondo State Government.
The striking workers, who are members of the Non-Academic Staff Union and the Senior Staff Association of Nigeria Polytechnics, staged a peaceful protest on the institution’s campus to express their grievances.
The aggrieved staff revealed they are being owed six months’ salaries and accused the government of failing to implement the national minimum wage.
They carried placards with messages including, “We are hungry, pay our six months’ salaries,” “Mr Governor, please implement our 2025 budget,” and “Acting Rector, please clear our 2022, 2023, and 2024 promotion arrears.”
During the protest, the Chairman of NASU, RUGIPO chapter, Mr. Julius Olugbenga-Aro, and his SSANIP counterpart, Mr. Saka Olokungboye, called on Governor Lucky Aiyedatiwa to urgently address the workers’ demands.
They lamented the hardship faced by their members, saying many are unable to meet basic needs due to the unpaid wages.
Olugbenga-Aro stated, “This protest is to express our frustration over the non-payment of six months’ salary arrears and the failure of the Ondo State Government to implement the national minimum wage for polytechnic staff.”
While acknowledging some of the governor’s developmental efforts at the institution, including the recent approval for the polytechnic’s conversion to a university, the union leaders appealed for more urgent actions.
They urged the state government to approve immediate payment of the outstanding salaries, ensure full implementation of the 2025 institutional budget, and begin payment of the new national minimum wage.
They also warned that failure to act swiftly could result in prolonged disruptions to the academic calendar, further affecting students and the institution at large.
A Federal Capital Territory High Court in Abuja on Tuesday awarded the sum of N100m in general damages against Louisville Girls Secondary School, Gwagwalada, for negligence of duty of care which led to the death of a student.
Mr Ifeanyi Ikpeatusim had sued the school for negligence that resulted in the death of his 9-year-old daughter, Kamzie,
In the suit marked CV/1738/18, Ikpeatusim alleged that the school’s failure to provide adequate medical attention after Kamzie who fell ill shortly after her admission and resumption in the school led to her untimely death.
Kamzie, who was admitted as a boarding student in September 2017 became severely ill by October 2 and died a few days later.
Justice Sylvanus Oriji, while delivering judgment in the suit brought before the court after awarding the N100m cost, ordered a 10 per cent interest on the judgment sum from April 8 until full payment.
He also awarded an additional N300,000 as the cost of the suit.
Justice Oriji while pronouncing the decision of the court, held that the evidence presented showed the school and its agents acted negligently by failing to attend promptly and adequately to Kamzie’s medical needs.
“The claimant established his allegations of negligence against the school.
“There is no amount of money that can bring back the child to life,” he stated.
Justice Oriji however acknowledged the fact that one significant outcome of the case was the improvement of the school’s sickbay following the incident.
He noted that the presence of doctors attending to students twice daily was a commendable development.
While the claimant had asked the court to order the school to name one of its structures in Kamzie’s name in her honour, Justice Oriji noted that the improvement in the school’s sickbay was sufficient enough to know the school is making amends from its mistake.
“The court thinks that the improvement in the sickbay, ensuring doctors are available twice daily, is in honour of Kamzie, as part of reforms recommended by her family.
“The claimant should take solace in the fact that Kamzie has been honoured by the school through these improvements.”
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