Minimum Wage Implementation: A Tightrope Walk for Nigerian States
The Federal Government of Nigeria's approval of the N70,000 minimum wage, signed into law by President Muhammadu Buhari on July 29, 2024, has been met with both applause from workers and significant financial apprehension from many state governments. While some states have commenced implementation, others are openly stating their difficulties, primarily citing an "over-bloated workforce" and insufficient revenue.
Borno State: A Case Study in Overstaffing
Borno State has emerged as a prominent example of a state grappling with these challenges, particularly at the local government level.
State Government vs. Local Government: It's crucial to differentiate. Borno State Governor Babagana Zulum has publicly stated that the N72,000 minimum wage (slightly higher than the N70,000 national benchmark) has been fully implemented for state civil servants and primary school teachers in Borno. This suggests the state's direct payroll has absorbed the increase.
Local Government Area (LGA) Challenges: The real struggle in Borno is concentrated at the Local Government Area (LGA) level. The Permanent Secretary of the Ministry of Local Government and Emirate Affairs, Modu Alhaji Mustapha, revealed that:
Massive Workforce: The 27 LGAs in Borno State collectively employ an estimated 90,000 workers. This figure is considered "over-bloated" when compared to other states like Kano, which despite a larger population, manages its 44 LGAs with a workforce of around 30,000.
Unsustainable Wage Bill: This large workforce translates into an unsustainable monthly wage bill. For instance, the Maiduguri Metropolitan Council (MMC), one of Borno's LGAs, sometimes receives less than N700 million in monthly federal allocations. However, it requires an estimated N778 million just to cover salaries at the N70,000 minimum wage rate. This leaves no funds for critical services like health, water, security, or development projects.
Governor's Directive and Caution: Governor Zulum has directed all 27 LGA chairmen to immediately implement the N70,000 minimum wage for their workers. However, he has explicitly warned against staff retrenchment as a solution. He urged them to return to their communities, consult stakeholders, and develop "workable solutions" for the salary problems at the local government level. This indicates a desire to avoid mass layoffs while still needing to address the financial reality.
Broader Challenges for Nigerian States
Borno's situation mirrors the concerns of many other states across Nigeria:
Fiscal Capacity and Revenue Generation: Many state governments heavily rely on monthly allocations from the Federation Account (derived largely from oil revenues). When these allocations are insufficient to cover basic recurrent expenditures like salaries, particularly with an increased minimum wage, states face severe financial strain. Their internally generated revenue (IGR) often falls short of bridging the gap.
Over-bloated Civil Service: Beyond Borno, many states inherited or have accumulated civil service workforces that are larger than their financial capacity can comfortably sustain. This is often due to political patronage, lack of proper workforce planning, and a reliance on government jobs as a primary source of employment.
Prioritization of Wages vs. Development: When a significant portion, or even all, of a state's or LGA's revenue goes towards salaries, little or nothing is left for capital projects, infrastructure development, healthcare, education, or other essential public services. This impedes overall economic growth and citizens' welfare.
Cost of Living vs. State Capacity: While the N70,000 minimum wage is a step towards providing a more livable income for workers amidst high inflation and cost of living, the states' ability to pay it consistently is a critical hurdle. Many workers, even those now receiving N70,000, still argue it's insufficient.
Union Pressure: The Nigeria Labour Congress (NLC) and other unions are understandably pushing for full and immediate implementation, putting significant pressure on state governments.
Varied Financial Capabilities: Not all states are financially equal. States with strong IGR or higher federal allocations might find it easier, while those with weaker economic bases will struggle more. Reports indicate that even as of May 2025, at least 20 states had not yet commenced payment of the new wage for all categories of workers.
In summary, while the N70,000 minimum wage aims to improve the welfare of Nigerian workers, the implementation is fraught with challenges, especially at the local government level, due to a combination of overstaffing, limited revenue, and the broader economic climate. States like Borno are actively seeking sustainable solutions without resorting to mass retrenchment, highlighting the complex balancing act between workers' welfare and fiscal responsibility.
I'm Aisha shehu
Talksocialtalka News
