Civil Servants May Get Up To N100,000 Minimum Wage As TUC Factors Economic Realities

Nigerian Civil servants may get N100,000 or above as minimum wage to cushion the effect of the fuel subsidy removal and a much-anticipated currency devaluation by the Central Bank of Nigeria.

Festus Osifo, the President of the Trade Union Congress of Nigeria gave the hint during an interview on Arise TV, monitored by THE WHISTLER.

He argued that it is unfair for workers to earn N30,000 considering the rates of prices, adding that N70,000 will not be adequate to cushion the effect of a ‘futuristic price’ when the naira is devalued in line with the plans of the new government.

Experts believe that a minimum wage increase would ameliorate the pains inflicted on citizens after a surprise price hike of an average of N519 per litre of Premium Motor Spirit.

Nigeria’s fuel subsidy which is not beneficial to the poor, according to the Group Executive Officer of the Nigerian National Petroleum Company Ltd, Mele Kyari, has become unsustainable for the country that has already accumulated about N77trn debt.

President Bola Ahmed Tinubu has removed the subsidy which is leading to price hikes while workers earn N30,000 as minimum wage.

But the TUC is pressuring the government to N200,000 minimum wage, citing ‘economic realities.’

But Osifo admitted that the N200,000 demand is ambitious.

Inflation is currently at 22.22 per cent according to the National Bureau of Statistics but KPMG estimates June figures to be over 30 per cent.

Osifo said, “Remember in 2019 when we negotiated the N30,000 minimum wage, as at then what was our inflation figure? If you look at the N30,000 as then, the net present value of that N30,000, by the time you discount the exchange rate which was N300 plus as at that time, today exchange in the parallel market is about N750 which is almost times two of that figure. If you look at inflation that has persisted from that time to now, it is super double-digit inflation. When we say double-digit inflation, it could be somewhere around 10-12 per cent. But when we are doing 22 per cent, I best refer to it as super double-digit inflation.

“When you put all that together, the N30,000 as of then is supposed to be over N70,000 as of today. We are also anticipating the future. They say the exchange rate is moving towards N630, although CBN came out to counter that but from the intel that we are having, the exchange rate will most likely move. It is just a matter of when.

“So, when that exchange rate moves for example to N650, the value of the parallel market will now depend on how you fund the unification value. If today the CBN moves at N650 and you still have a lot of items that are on the list CBN is not funding and people still go to the banks and are not able to get, what will happen is that people are going to patronize the parallel market. When they patronize the parrel market, the gap will widen.

“We could see a scenario where the parallel market could hit N1000 this year. So, we are trying to be futuristic and we factored all these into the value and we now added the mark-up. Of course, we will not go there with our barest minimum. If we go there with our barest minimum, the government is still going to negotiate. We also added a little which I will not reveal. We think that what we have submitted is reasonable. We think that what we have submitted is doable considering the devaluation of the naira over the years and also considering our level of inflation today.”

The TUC boss insisted that the union heads are determined to begin a negotiation with the government, adding that they would vacate the existing court order barring protest if the FG fails to act.

“We believe that on the 19th of June, 2023 all parties are going to sit together and kickstart the process of negotiation. But if the government does otherwise because they think that they have a court order, they will have the trade unions to contend with. Court orders can be vacated. We are not deterred in any way by the court order but we believe that all parties are going to sit down on that they to meet,” he added.

Osifo said a committee would also be set up to monitor the implementation of agreements reached with the government.

According to him, failure to begin the implementation of agreement reached after the meeting would attract dare consequences.