FG Implements N70,000 Minimum Wage, Boosting Salaries to N4 Trillion

The Federal Government of Nigeria has officially begun disbursing the newly established minimum wage of N70,000 to more than 1.2 million civil servants. This development comes after seven months of negotiations, during which adjustments to salaries across various levels of the federal civil service were discussed. However, not all parties are in agreement.

The Nigeria Union of Pensioners (NUP) Southwest has voiced opposition, criticizing the Federal Government’s handling of the situation and expressing concerns about the recent hike in fuel prices. The private sector has also raised issues regarding compliance with the new wage and the potential strain on businesses.

Federal Government Implements New Minimum Wage

The federal government implemented the N70,000 minimum wage after prolonged negotiations that concluded with a decision to raise the minimum wage for public servants. The payment began on Thursday, affecting over 1.2 million civil servants, with the new wage reflected in the September 2024 salary. A warrant issued by the Accountant-General of the Federation, Dr. Oluwatoyin Madein, officially authorized the payments, directing the Budget Office of the Federation to facilitate the disbursement.

Breakdown of Salaries

Documents from the National Income, Salaries and Wages Commission provide a detailed breakdown of what civil servants will earn annually under the Consolidated Public Service Salary Structure:

Grade Level	Annual Salary (Naira)
Level 1	930,000
Level 2	934,160
Level 3	937,713
Level 4	950,243
Level 5	973,123
Level 6	1,041,786
Level 7	1,277,667
Level 8	1,479,276
Level 9	1,641,226
Level 10	1,806,041
Level 12	2,007,152
Level 13	2,182,637
Level 15	2,358,936
Level 16	3,611,689
Level 17	6,918,560

The salary for each grade level is adjusted annually before promotions, with specific amounts allocated for each grade. For example, a Level 1, Step 2 public servant would earn N935,585 annually.

Confirmation of Payment and Coverage

The Director of Press at the Office of the Accountant-General of the Federation (OAGF), Bawa Mokwa, confirmed that the new minimum wage payment had commenced. An anonymous civil servant also verified that some employees had already received the updated salary. The payment covers 1,236,824 workers, including personnel from Ministries, Departments, and Agencies (MDAs), the Armed Forces, Paramilitary forces, Federal Universities, and Polytechnics and Colleges of Education.

Financial Impact and Approval

The new wage structure became official after President Bola Tinubu signed the minimum wage into law on July 29, 2024, following discussions with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). The Committee on Consequential Adjustments also finalized that the implementation date would be retroactive to July 29, 2024. The financial impact is significant, with the Federal Government expected to allocate N334.9 billion per month, translating to an annual wage bill of N4.019 trillion.

Reactions to the New Minimum Wage

Organized Labour and Civil Servants

The NLC and TUC have called for other organizations to implement the new wage. However, some civil servants expressed dissatisfaction, citing the country’s ongoing economic challenges. Pensioners, particularly those in the Southwest, have rejected the N70,000 wage and are pushing for a renegotiation to secure a N250,000 minimum wage.

NUP Southwest’s Opposition

The NUP Southwest has rejected the Federal Government’s N70,000 minimum wage, presenting several concerns during a recent zonal meeting. Dr. Olusegun Abatan, the NUP Southwest Publicity Secretary, cited the following reasons for their rejection:

• Fuel Price Increase: The government raised fuel prices before implementing the new minimum wage, which worsened the economic situation.
• Labour Centers’ Naivety: The NUP accused labour unions of being misled into accepting the N70,000 wage, allegedly with false promises that fuel prices would not increase.
• Federal Government’s Tactics: The government was accused of tricking union leaders like Comrade Joe Ajaero and Festus Usifo into accepting the deal.

The NUP Southwest has called for the labour unions to return to the negotiating table and demand the originally proposed N250,000 minimum wage. They have also pledged their support for any form of protest or strike to achieve a more reasonable wage.

Private Sector Concerns

The private sector has also expressed reservations about the new wage, particularly with regard to compliance and the economic strain it may place on businesses. Some key figures from various organizations have voiced their opinions:

• Dr. Ikenna Nwosu (Nigerian Economic Summit Group): Argued that no one could be jailed for non-compliance unless a law mandates it. He also pointed out that the Federal Government doesn’t have the authority to enforce a minimum wage across all sectors but should promote voluntary compliance by providing guidelines for calculating wages.
• Dele Oye (President, Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture): Urged the government to engage with stakeholders to address concerns about rising fuel prices and the economic challenges facing businesses.
• Dr. Femi Egbesola (National President, Association of Small Business Owners of Nigeria): Warned that small and medium-sized enterprises (SMEs) might struggle to pay the new wage, potentially leading to job cuts or business closures.

Manufacturers’ Perspective

Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), stated that many manufacturers were already paying wages above the N70,000 minimum. However, he acknowledged that smaller businesses might need government support to meet the new requirements. He stressed that while the minimum wage increase could boost consumer purchasing power, the government must assist businesses that may face difficulties in complying with the policy.

Support for the New Minimum Wage

Despite the challenges, Ajayi-Kadir highlighted that manufacturers support the new minimum wage because it is expected to increase disposable income, which in turn can stimulate demand and benefit businesses in the long run.

Conclusion

The Federal Government’s rollout of the new N70,000 minimum wage has triggered mixed reactions across different sectors. While civil servants are starting to receive the increased pay, organized labour, pensioners, and the private sector have raised significant concerns. As the government works to implement the new wage, it must also address the broader economic implications and ensure that both public and private sectors can sustain this change effectively.

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