New Minimum Wage Structure in Nigeria From 1978 To 2020

The 1999 constitution of the federal republic of Nigeria established in section 14(b), that the major duty of the Nigerian government is to cater for the safety and welfare of all citizens. Underpayment of citizens has been one of the major concerns for Nigerians; an issue that is often the cause of friction between the government and its very own citizens. In November, 2019, the government agreed to pay a new minimum wage based on the new minimum wage structure negotiated on different occasions with Organized Labour (Represented by Joint National Public Service Negotiation Council; and bodies consisting Senior  Staff Association of Nigerian Universities, SSANU, Non-Academic Staff Union of Educational and Associated Institutions, NASU and National Association of Academic Technologists, NAAT as the case may be.

New Minimum Wage Structure in Nigeria From 1978 To 2020 1

What is Minimum Wage?

Minimum wage in Nigeria refers to the amount of remuneration all workers in Nigeria are entitled to get after working for an organization for a period of time. The amount is a standard and cannot be altered directly or indirectly without the agreement of the National Labour Congress. In ideal situations, the minimum wage should apply to every worker in Nigeria; however, in practice this is far from the true situation as it is, even in the developed countries around the world.

The minimum wage if implemented would reduce inequality and protect the rights of all workers regardless of gender, nationality. The International Labour organization established and transmitted through the nigeria labour congress that the sustainable development goal of the United nations seek to balance the three dimensions of sustainable development which is in economy, social and environment.

A system that doesn’t implement the minimum wage like most developing and under-developed nations, can put employees in all forms of insecure situations.

History and Timeline of Minimum wage in Nigeria

The famous statement of the current President of Nigeria Labour Congress, Comrade Ayuba Philibus Wabba, summarizes the situation of Nigerian workers throughout history. He said, “Nigerian workers have never in history got any increase in wage on a platter of gold”. This strong statement means that Nigerians have never had their salary or wage structure reviewed and increments made except that it was legislated in response to agitations and lamentations from the citizens.

The history of the situation of workers and their remuneration in Nigeria is quite interesting, or rather an unfortunate one, considering the fact that there was absence of an organized labour structure to cover the whole of Nigeria in salary negotiation process until 1978, which is exactly 18 years after her independence from colonial rule. During the administration of (Nigerian president 1978), an organized labour congress called the Nigeria Labour congress was instituted. Comrade Hassan Sunmonu became the first president of the first organized labour congress in Nigeria.

Timeline of Minimum wage in Nigeria

The struggle between the Labour union and the government has always been intense, since the inception of Nigeria Labour Congress, both parties claim to serve the interest of the citizens.  The government in history had obviously looked to politicize the union, and the members of the union are  also not completely clean; this is evident in the number of politicians with a history in the union. However, regardless of the failure of the union, it has managed to address some challenges of nigerian workers by extending the theme of the campaigns and strike actions to highlight the very personal matters affecting Nigerians altogether. The following  is a timeline of the history of the Nigerian Labour Congress.

The administration of comrade Hassan Sunmonu instigated a major protest which led to a strike action that forced the president of the federal republic of Nigeria, President Sheu Shagari to agree to a wage structure of N125 per month in 1981.

The administration of comrade Hassan Sunmonu ended and was succeeded by Comrade Pascal Bafyau. The new president of Nigerian Labour Congress, NLC, started a new minimum wage structure demand in 1989; the demand was finalised by his deputy, Comrade Adams Oshiomole, between 1989 and 1990  with a conclusion of N250 per month.

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During the military regime of General Abdulsalami Abubakar, the request for another minimum wage resulted in the N3,000 per month. Although the Nigerian Labour congress was disbanded in the same year.

The National Salaries, Incomes & Wages Commission (NSIWC) was established by Act 99 of 1993.  The government created NSIWC to address the challenge of nigerian workers’ salary  and wages.

After the return of the nation to civilian rule, the Nigerian Labour Congress was revived with a former deputy president, Comrade Adams Oshiomole now becoming the New President. The new recognition was followed by a serious demand for a new  minimum wage structure in Nigeria. The civilian government administration of President Olusegun Obasanjo agreed after negotiation to the new demand of N5,500 and N7,500 for state and federal workers respectively.

In 2010, under the administration of the former Nigerian President Goodluck Ebele Jonathan a new minimum wage of N18,000 was agreed, after the tripartite committee meetings. The national assembly also signed it into law that a review on the minimum wage will be made every 5 years.

The current administration of President Muhammadu Buhari inaugurated a tripartite Committee on the National Minimum Wage which led to the approval of N30, 000 new national minimum wage for Nigerian  workers on November, 2019. Although, the implementation started on 18th of April, 2020.

New Minimum Wage Structure in Nigeria

President Muhammadu Buhari signed the minimum wage bill into law  in 2019, but it took until 18th of  April 2019 for the Minimum wage bill to be made effective immediately; the implication of the immediate implication is that it is only the workers that earn N18,000 and below N30,000  that will have a remuneration of at least N30,000. The N30,000 which is the minimum wage, in practice,  is not for every worker in Nigeria.

The Core Civil servants grade is from  level 17 to Level 7. The level 17 being the lowest and the level 7 being the highest.

The minimum wage increase for those within the salary structures is summarized as follows:

The percentage increase in salary for Core Civil servants in level 17 to level 15 is a fourteen percent (14%) increase; for Core civil servants in level 14 to 10 it is a sixteen percent increase (16%); for Core civil servants in level 9, the increase is a nineteen percent (19%); for level eight core civil servants the increase is twenty percent (20%); for workers in level 7 the increase is a (23.2%).

For workers that are not amongst the core civil servants the increment in salary is stated as follows:

The percentage increase in salary for other Civil servants in level 17 to level 15 is a ten and a half percent (10.5%) increase; for civil servants in level 14 to 8 it is a sixteen percent increase (16%); for workers in level 7 the increase is (23.2%).

Beneficiaries of the  New Minimum Wage Structure in Nigeria

A news of an increase in the minimum salary for nigerian workers is always met with much enthusiasm from the citizens, and much appreciation for the government of the day, especially from those in the lower class. The news also doesn’t fall short of an equal measure of criticism on its irrelevance when compared to the economic downturn of Nigeria. Critics have come up with arguments that the increased amount  is inconsequential due to the falling value of the naira, and that the process lacks monitoring to ensure private companies and unorganized employment contracts comply.

We have mentioned earlier that in ideal situations all workers are entitled to the minimum wage; It doesn’t matter if the employees are immigrants or indigenes, women, old or youth. However, in nigeria, in practice, the new minimum wage only applies to some of civil servants that belong to any of the five salary structures stated as follows: Consolidated Tertiary Educational Institutions Salary Structure CONTEDISS, Consolidated Tertiary Institutions Salary Structure, CONTISS II, Consolidated Public Service Salary Structure, CONPSS, Consolidated Health Salary Structure, CONHESS, Consolidated Research and Allied Institutions Salary Structure, CONRAISS. Although there are currently over ten different salary structures in Nigeria.

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Consolidated Research and Allied Institutions Salary Structure, CONRAISS.

This salary structure was set up based on the agreement of the Federal Government with Organized Labour (Represented by Joint National Public Service Negotiation COuncil ) on a review of salary for employees in public service and approved by the Federal Government on 18th of April, 2019.

Consolidated Tertiary Institutions Salary Structure, CONTISS II

This salary structure applies to Non-Academic staffs of Nigerian federal universities; it was set up based on the agreement of Federal Government with individual bodies consisting Senior  Staff Association of Nigerian Universities, SSANU, Non-Academic Staff Union of Educational and Associated Institutions, NASU and National Association of Academic Technologists, NAAT on 5th of November, 2009.

Consolidated Tertiary Educational Institutions Salary Structure CONTEDISS

This salary structure was set up based on the agreement of the Federal Government with Organized Labour (Represented by Joint National Public Service Negotiation COuncil ) on a review of salary for employees in public service and approved by the Federal Government on 18th of April, 2019. The agreement supersedes the previous agreement on 16th of July 2018.

The negotiation of salary structure on the 18th of April, 2019 covers employees in public service under the salary structure CONTEDISS, Consolidated Public Service Salary Structure, CONPSS, and Consolidated Health Salary Structure, CONHESS,

Misconceptions about the New Minimum Wage in Nigeria

Here are a few compilations to help you to answer a few questions and hopefully demystify the misconceptions surrounding the new minimum wage.

A) Does increasing the minimum wage put the economy at a risk of inflation?

Answers:

  1. Not likely. However, an increase in the minimum wage may lead to  an increase in prices of goods and services, but it doesn’t cause so much of an impact. In fact, the impact is usually so low that the employers benefit more for many reasons which include the employees having a better attitude towards work.
  2. Loss of Job for employees in Small businesses Increase in the minimum wage may affect the employment opportunities for young people–young men and women who are fresh graduates and have not gained enough working experience to be considered a serious asset to companies. Also increase in minimum wage is usually followed with loss of job, employers that cannot afford to pay all employees the minimum wage relieve staff members. It is helpful in this case if employees understand that it may take some time to get a job but the least the next job will pay is the minimum wage.

b) Does minimum Wage increase remove people from  poverty

Answer: Not really in developing nations like Nigeria.

In developed countries an increase in the minimum  wage  is effective because it provides an improved standard of living  for employees in well defined formal employment agreements, and considers the protection for those  in non-formal employment agreements also; this is not guaranteed for developing nations like nigeria. The minimum wage is focused on the employees in formal employment arrangements alone in practice, especially the employees in public service and little or no supervision for the implementation in the interest of employees in private businesses and informal agreements.

Arguments Related To The New Minimum Wage Structure in Nigeria

1) The State Government Incapability to Pay Minimum Wage:

People with this opinion argued that most state governments out of the 36 in  Nigeria are not effectively executing the payment of the N18000 minimum wage. They blame the government allocation distribution system for disbursing amounts that are insufficient to cover the state expenses, when those states solely depend on the money from the government and have no internal revenue means like lagos: that have many alternative means of revenue. These people argue that the government must increase the state allocation before it can expect compliance, or leave the states out of the negotiation outcome.

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In support of this opinion, The elected Governor of Zamfara State, Abdulaziz Yari, said: “the problem of the state is the capacity to pay what is agreed. He noted that most states have not successfully executed the N18,000 naira minimum wage. While other states pay up to 35%, some states pay as high as 50% while others still have salary arrears.”

A popular critic of state dependency on the FG revenue argument is Azubuike Azubuike, chairman of the Petroleum and Natural Gas Senior Staff Association of Nigeria. He mentioned that the inability of governors to create a means of revenue for the state is an evidence of their inability to run the states and they should leave office for integrity sake.

2) Increase Inconsequential:

This is arguably the biggest controversy on the minimum wage in Nigeria. People noted that the value of the naira is so low that the increase in reality is inconsequential to the challenges of the citizens. People believe that in response to increased wage, there will be an inevitable rise in prices of goods and expenses on necessities, and this will make life further unsecured.

These people argue that if the government raise the minimum wage to a good extent, people would comply without hesitation.

3) Lack of implementation and Encouraging Environments:

Another important argument is the unfavourable conditions for the implementation to become a reality. If small businesses are not having the right circumstances  and support from government in terms of amenities like electricity and others to encourage growth, it will be impossible to except total compliance with policies that directly affect them and their businesses

If the implementation is successfully carried out and also made to extend to the private and non-formal employment setting, the Nigerians will be able to afford goods and services, the supply for their demand will improve and the chances of improving the economy can increase.

4) Wage Rate Gap:

This is an interesting argument. A lot of people noted that the government is only interacting with the labour in a premeditated negotiation process, and is not committed to the protection of the labour right of its citizens.  These people affirmed their claim of hypocrisy on the government  by pointing to the fact that top government workers earn enough to make lawmakers in developed nations envy them. But the lower level workers live below the international poverty line and had a proposal of N56,000 new minimum wage salary structure turned down. a negotiation of 30,000 took months to finalize; the amount which isn’t even enough to live a decent life.

Conclusion

The International labour organization and the Nigerian labour congress  have proven to be well informed of the situation surrounding the salary of workers in Nigeria. The organizations have adopted many methods and made interventions to address these issues. Everything is kept in principle to create a balanced society: that will  have the labour of workers justified in the wages and salaries they receive; and also extend the benefits to those in private, non-formal, unorganized employment agreements. The only condition left is the implementation of these principles into practice.

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