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Oyo State Governor-elect is proposing to negotiate the minimum wage – why it matters

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Oyo State Governor-elect is proposing to negotiate the minimum wage – why it matters

Oyo State Governor-elect, Seyi Makinde believes it is wrong for the federal government to determine minimum wage for the states.  According to Makinde, states, based on the principle of federalism, should determine the viable minimum wage for its civil servants. 

Why it matters: Seyi Makinde echoes the sentiment of several other governors who had opposed the new wage bill on the basis of their inability to foot it. Several states in Nigeria would be unable to implement the wage bill, and many of those who will take it head on will not be able to do so without defaulting on payments or sinking into debt. At the federal level, the country is failing to meet revenue targets and has had to borrow to foot recurrent expenditure – comprising wages, allowances and other running costs of the bloated federal bureaucracy (just as with the case in many states.)

His proposal: Makinde makes a policy case for a negotiated implementation of the minimum wage. The governor-elect has been critical of the incumbent administration’s haste to agree to implement the new wage bill calling it a ‘bobby trap’ for his incoming administration. Makinde makes valid arguments as Oyo State has struggled to pay its 62,000 workers (stats by Governor Ajimobi), even when the minimum wage stood at about N19,000. As at January 2019, workers of the Oyo state owned tertiary institutions are being owed up to 18 months salaries.

A 2017 data by BudgIT revealed that Oyo state is indebted to the tune of over 222 billion (domestic and external debt).

What he will do:  Makinde said, “In the particular case of Oyo State, a committee will begin parley with the leadership of the Nigeria Labour Congress (NLC) from the first week in June to determine the extent to which government can implement not only the minimum wage, but indeed provide buffers for the workers to live decently.” 

Bottomline: Without significant improvement in federal and internally generated revenue, states like Oyo will find themselves unable to fulfill salary obligations with the new wage bill. Fulfilling it will also mean more debt and inability for governors to execute capital and infrastructural projects to improve the lives of the other citizens or drive investments to their state. Governor-elect Makinde makes a solid case but will find it hard to convince the workers. However, Makinde has put the right foot forward with promises to put politician’s wages only second to the civil servants. He will need to make more sacrifices to woo the workers. 

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