The federal government’s wage bill is set to almost double if the organised labour insists on its planned increase in the minimum wage.
News About Nigeria reports that if the proposed minimum wage of N615,000 gets implemented, the government’s personnel costs for its 1.5 million workers will rise from approximately N7 trillion to N11 trillion.
According to Ben Akabueze, the director general of the budget office of the federation, the government’s personnel cost currently stands at over N5 trillion, with 1.5 million workers under the federal government’s payroll. However, the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) are demanding a 1,950 percent increase in the minimum wage from N30,000 to N615,000.
The labour unions claim to have arrived at the minimum wage recommendation after calculating the monthly cost of living for Nigerian workers, including food and transportation expenses.
According to the NLC’s “cost of living estimate,” a Nigerian worker needs N9,000 to feed for 30 days, amounting to N270,000, and at least N110,000 for transportation per month.
However, the federal government has proposed N48,000, leading to a dispute between the organised labour and the government. It is unclear if the government is willing to compromise, as the labour unions insist on N615,000 minimum wage and have given states yet to implement the N30,000 wage an ultimatum of two weeks.
According to analysts, while a pay increment is necessary due to the high cost of living, the proposed wage by NLC/TUC may not be feasible. On its part, a recent report by the International Monetary Fund (IMF) said the federal government may need to raise a supplementary budget to accommodate any wage review.
IMF stated in its latest country staff report for Nigeria that the negotiated amount may surpass the budgeted amount in the original 2024 budget.
