The National Assembly has reduced the allocation for minimum wage and salary-related payments for Ministries, Departments, and Agencies (MDAs) by 45% in the approved 2024 budget.
President Bola Tinubu initially proposed a budget of N1 trillion for Public Service Wage Adjustment for MDAS (including Arrears of Promotion and Salary Increases & Payment of Severance benefits and Minimum Wage Related Adjustments).
However, the approved budget by the National Assembly, now signed by the president, reflects a significant reduction to N550 billion for the same fiscal item, indicating a decrease of N450 billion from the proposed amount.
The Nigerian Government earlier announced a revised minimum wage to be implemented starting April 1, 2024. The existing minimum wage of N30,000 is slated to end by March 2024.
Idris Mohammed, the Minister of Information and National Orientation, revealed that a new wage regime would come into effect on April 1, 2024. The government is in talks with labour to constitute a committee to work on the new wage structure.
He said:
“Certainly, there Is a new wage regime that will come in on April 1, 2024. That is why these palliatives were targeted so they would cushion economic hardship before then. In our negotiation with Labour, we said that the wage issue was not something one could just fix. A committee that will also involve Labour itself will work on it.
“The committee is being constituted and we are talking to Labour about it. And by the time this current wage regime expires by the end of March, we will expect that a new wage will begin by April.
“It is in this wage regime that we will now have a proper salary structure for workers across the length and breadth of Nigeria. We expect that the private sector and state governors will also do the same.”
Also, President Bola Tinubu expressed the Federal Government’s commitment to implement a new national living wage for workers in 2024, emphasizing that it is both economically and morally necessary in a New Year message on Monday in Lagos.
Tinubu said:
“We will work diligently to make sure every Nigerian feels the impact of their government.
“The economic aspirations and the material well-being of the poor, the most vulnerable and the working people shall not be neglected.
“It is in this spirit that we are going to implement a new national living wage for our industrious workers this New Year.
“It is not only good economics to do this; it is also a morally and politically correct thing to do.
“Having laid the groundwork of our economic recovery plans within the last seven months of 2023, we are now poised to accelerate the pace of our service delivery across sectors.’’
Yet, this reduction in the budget for wage-related payments marks the second instance of such cuts, with the government previously slashing the supplementary budgetary allocation for wage awards to federal civil servants by N100 billion.
The reasons behind the decision to cut the allocation for wage awards remain unclear, particularly amid challenges faced by federal workers due to policies such as fuel subsidy removal.
The move by the National Assembly to reduce the allocation for minimum wage-related expenditures raises questions about the potential impact on workers and their economic well-being, especially in the context of ongoing economic challenges.