State governments will will go bankrupt with N30,000 minimum wage – Governors

State governments will will go bankrupt with N30,000 minimum wage – Governors
November 14 23:06 2018

By Nasir Kura

Governors of the 36 states of the federation said on Wednesday that it is practically impossible for them to implement the N30,000 new minimum wage recommended by the Tripartite Committee on the Review of National Minimum Wage without downsizing their workforce.

Rising from an emergency meeting in Abuja, chairman of the Nigeria Governors Forum (NGF) and governor of Zamfara state, Mr. Abdulaziz Yari, said only Lagos out of the 36 states can afford N30,000 minimum wage.

He said the only alternative for state governments to be able to pay the N30,000 minimum wage was for the federal government to accede to the review of the national revenue allocation formula.

“We have seen what has been presented to the president by the committee. As a member of the committee, Kebbi Governor said the committee did not take our submission of N22,500 because it came late. I am surprised how you can do this without the inputs of the states because the states are the key stakeholders in this business.

“So a situation whereby our report is not taken or considered by the tripartite committee to present to the president then I don’t know how the committee wants us to work. But we still say we want to pay, but the issue is the ability to pay. If we say no, it is not about the ability to pay, just pay, I don’t know how this formulae will come and I don’t know
how we can get solution to the issue.

“The N18,000 today, when the president assume office 27 states were not able to pay, not that they choose not to pay. So now that you say N30,000, how many of them can pay? We will be bankrupt. So as Nigerians we should look at the issue seriously. While other people are saying that governors are flying private jet and living in affluence, that one is not luxury but compulsory.

“The issue of government overhead cost if you put it together with personnel cost, it cannot solve this problem. Like Lagos that is paying about N7 billion as salaries if you say it should pay N30,000, now it wiĺl be N13 billion. From our calculation, it is only Lagos State that will be able to pay N30,000. As Nigerians, this is our country, there is no other country we have and we should be fair to this country,” he said.

The governor said the Nigeria Governors Forum has set up a committee to meet with President Muhammadu Buhari to work out another formula to address concerns on the viability of the implementation of the new minimum wage.

He said members of the committee are Governors Akinwumi Ambode of Lagos state, Atiku Bagudu of Kebbi state, Simon Lalong of Plateau state, Mohammed Abubakar of Bauchi state, Udom Emmanuel of Akwa Ibom state, Dave Umahi of Ebonyi state, Ifeanyi Ugwuanyi of Ebonyi state and Nasir El-Rufai of Kaduna state.

Asked on the way forward, the governor said: “As for the way forward, we will continue to talk with labour, let them see reasons why governors have difficulties. Some of us have Internally Generated Revenue (IGR). For instance, the money Lagos state is using to pay is not coming from Abuja. They have a way of getting their money from the IGR and that is why they can afford to pay. They get money through VAT. Apart from Lagos, even Rivers cannot afford to pay. So we have been crying out about this since 2011 but no one will listen.

“One critical example is that some state ration their salaries while some other put everything they earn on the table and ask labour to come and see and they ask them to suggest how much should go for capital and personnel cost. Some say 70 percent for personnel cost and 30 percent for capital projects and yet the states cannot pay and they put the remaining as outstanding.

“If you are talking about oil, The price is not what it use to be, from last year to date, it is $20 less from $75 to $55. So where is the money to pay? We should not exploit this matter further we are leaders today, tomorrow others will be there. So let us look at this matter seriously to see how we can do it properly. It is our primary responsibility to see that everybody is happy.”