In the just concluded week, Federal Government (FG) averted a nationwide industrial action, planned by the Nigeria Labour Union, having shifted ground to accommodate a new minimum wage consequential adjustment for federal workers on the salary grade levels 7 to 17.
FG revised its proposed consequential salary adjustment to 17% (from 11%) for workers on grade levels 7 to 14, and increased it to 12% (from 6.5%) for workers on grade levels 15 to 17 after several sessions of protracted negotiations with the labour unions.
Given the FG’s new offer, the labour unions, represented by the Joint Nigeria Public Service Negotiating Council (JNPSNC), were forced into further negotiation and suspension of their planned strike action (which was meant to hold on Wednesday, October 16, 2019) following their demand for 29% consequential increase in wages for workers on grade levels 7 to 14, and 24% increase for officers on grade levels 15 to 17.
According to the Minister of Labour, Dr Chris Ngige, who earlier warned that organized labour might not achieve the percentage increases they requested for workers on salary grade levels 7 to 14 and 15 to 17, the FG had already budgeted over N160 billion in the 2020 budget for the implementation of the new minimum wage adjustment, and this had tilted the ratio of the proposed 2020 recurrent expenditure to capital expenditure even to a discomforting ratio of 76:24.
Subsequently, the two parties finally agreed on the consequential adjustment of 23.2% for workers at grade level 7; 20% for those on grade level 8; 19% for staff on grade level 9; 16% for workers on grade levels 10 to 14; and 14% for those on grade levels 15.
In a related development, President Buhari, in efforts to boost the morale of frontline soldiers, mandated the service chiefs to urgently take steps to promptly pay the entitlements of fallen soldiers.
We feel that the eventual percentage increase of the consequential adjustment in the salaries for federal workers from grade levels 7 to 17, could exacerbate the recent increase in the general price of good and services, especially food prices amid border closure.
More so, we note that FG’s proposed increase in Value Added Tax and introduction of Communication tax, would whittle down the purchasing power of the workers.
Hence, rather than increasing taxe rates, we expect government to, as a matter of priority, widen the tax net to boost its collections while implementing policies that would increase the purchasing power of Nigerians.