In a significant development, the Federal Government declared that a new minimum wage regime is set to take effect on April 1, 2024. The announcement, made by the Minister of Information and National Orientation, Idris Mohammed, during an interview with The PUNCH in Abuja, revealed that the current N30,000 minimum wage would expire by the end of March 2024.
The revelation follows the removal of the fuel subsidy on May 29, 2023, by President Bola Tinubu, leading to an agreement with the Federal Government to pay N35,000 to each worker as a temporary measure to mitigate the subsidy removal’s impact.
Organized Labour, however, insisted that the N35,000 wage award was temporary and advocated for a review of the minimum wage in 2024. The negotiation process between the Federal Government and Labour has commenced, in accordance with the country’s labor law, which stipulates a minimum wage review every five years.
Analysis of the 2024–2026 Fiscal Framework budgets indicates that the Federal Government plans to allocate N24.66tn for salaries over the three-year period. With a workforce of about 1.5 million, concerns have been raised about the possibility of a bloated civil service, leading to calls for agency mergers and scrapping.
As the government anticipates salary increases in 2024 amid economic challenges, personnel costs, along with overheads and pensions, are expected to account for 29.18% of the total budgets for 2024, 2025, and 2026. This trend, however, raises concerns about fiscal deficits and a potential impact on capital expenditure.
President Bola Tinubu, in his budget presentation speech, emphasized the exploration of Public-Private Partnership arrangements to finance critical infrastructure, inviting the private sector to collaborate in unlocking the nation’s potential. The Minister of Budget and National Economic Planning, Abubakar Bagudu, acknowledged the government’s struggle to manage salaries amidst revenue challenges.
The proposed new wage regime, scheduled for April 1, 2024, aims to address economic hardships and provide a more sustainable salary structure for workers across Nigeria. The Federal Government expects private sector and state governors to follow suit in implementing the new minimum wage. The negotiation process between the government and organized Labour is ongoing, with both parties working towards a comprehensive and fair agreement.
