Local government chairmen in Nigeria have declared their inability to implement the proposed ₦62,000 minimum wage, terming the ₦250,000 demanded by organized labor as unrealistic and unaffordable. Despite the Tripartite Committee’s negotiations, which settled on ₦62,000, labor unions insist this figure does not reflect current economic realities.
President Bola Ahmed Tinubu plans to forward the proposed amount to the National Assembly for legislative approval, but labor leaders argue there is no consensus. The Supreme Court has deferred its decision on a related issue regarding local government financial autonomy, which affects their capacity to manage increased wage bills. Aminu Muazu-Maifata, chairman of the Association of Local Governments of Nigeria (ALGON), highlighted that current allocations from the Federation Account are insufficient for the proposed wage increase.
Economist Bismarck Rewane cautioned that raising the minimum wage without a proportional rise in productivity could harm the economy. He emphasized that while the wage increase aims to address economic challenges faced by workers, the supporting economic framework needs to be robust. Local government chairmen have called for understanding and financial assistance from higher authorities, stressing that their current revenue is already stretched thin with salaries and essential public services.
The ongoing debate sees stakeholders from various sectors weighing the feasibility and implications of the proposed wage adjustments, with upcoming legislative developments and the Supreme Court’s ruling being crucial. Muazu-Maifata reiterated the need for collaboration between labor, state, and federal governments to reach a sustainable resolution, emphasizing that local governments would comply with any legally enacted minimum wage but require financial support to do so.