Minimum Wage: Nigerian Governors Say Compelling States To Pay N62,000 May Lead to 40% Retrenchment of Workers

As the debate over Nigeria's minimum wage continues to simmer, state governors, represented by the Nigeria Governors Forum (NGF), have reiterated their staunch opposition to the proposed N62,000 monthly minimum wage, warning that implementing such a mandate could result in dire consequences, including widespread retrenchment of workers.According to a source privy to discussions at Friday's meeting of the minimum wage committee, the governors expressed concerns that enforcing the proposed wage bill on states could lead to the dismissal of up to 40 percent of workers across various states. The source cited heavy indebtedness among many states, exacerbated by loans inherited from previous administrations, as a major impediment to meeting the new wage demands.Out of Nigeria's 36 states, only 10 were deemed capable of affording the new minimum wage without compromising overall state development. These states include Lagos, Delta, Akwa Ibom, Bayelsa, Cross River, Rivers, Ogun, Kano, and Kaduna. However, the source highlighted the precarious financial situations faced by other states, where limited resources make it challenging to sustainably implement the proposed wage increase.

The NGF underscored the importance of considering Nigeria's federal system of government, which emphasizes the principle of "ability to pay." Drawing parallels with the United States, where gubernatorial salaries vary widely between states, the NGF argued against a one-size-fits-all approach to minimum wage, advocating for flexibility based on individual states' fiscal capacities.

In a statement issued by the NGF's Acting Director of Media and Public Affairs, Hajiya Halimah Ahmed, the forum urged all parties involved in the minimum wage negotiations to prioritize sustainability and realism. Emphasizing the need for equitable distribution of resources, the NGF cautioned against any agreement that would strain state finances and detract from development initiatives.

While recognizing the legitimate concerns of workers, the NGF appealed for a balanced approach that takes into account the socioeconomic context and the broader interests of the country. The statement underscored the importance of reaching a fair and durable agreement that benefits all segments of society.

As the minimum wage debate unfolds, the NGF's stance underscores the complex challenges facing Nigerian states in balancing fiscal responsibility with the welfare of workers. With negotiations ongoing, the coming days are likely to witness further deliberations as stakeholders seek a viable resolution to this contentious issue.