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States May Sack 600,000 Employees To Implement Minimum Wage - Politics - Nairaland

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States May Sack 600,000 Employees To Implement Minimum Wage by Islie: 5:32pm On Jul 09

Spend 130% of yearly IGRs on wage bills
Kano, Imo, others spend about 40% of total revenue on personnel


Govs need to create revenue-generating activities to prevent crisis, says Owoh
Worry over undocumented borrowings as domestic debts fall by 32% in three months

An increasing number of states are falling deeper into the historical cesspit of fiscal crisis with Kano, Imo, Adamawa, and Taraba state governments funding personnel costs with about 40 per cent of their retained revenue last year.

While the fiscal sustainability crisis has reached a worrisome level in some states, many states are affected to a significant degree, spending most of the internally generated revenue (IGRs) to pay salaries, gratuities and allowances.

Last year, the wage bills of the 36 states were 108 per cent of their IGRs, revalidating the claim that only a few states can pay without the monthly Federal Account Allocation Committee (FAAC) receipts.

According to data obtained from BudgIt, a fiscal sustainability advocacy organisation, states incurred a total of N1.94 trillion on personnel costs last year alone, the figure is 108 per cent of the total N1.8 trillion the states realised from IGRs in 2022, the most recent data available at press time.

The cost is almost 130 per cent of the average yearly IGRs of the states from 2018 to 2022, which was N1.49 trillion.


That period could be described as the golden era of the state IGR performance. But the anaemic growth trend in the period raises doubt about the consistency of the expansion seen in the period.

For instance, the figure grew from N1.1 trillion to N1.56 trillion in 2019 only to cave in by nearly N350 billion as it slid to N1.21 trillion in the COVID-19 year. But the crisis of consistent growth of Nigeria’s revenue profile as demonstrated by the states goes beyond the systemic disruption caused by COVID-19.

Recent history is replete with a rise and fall in revenue performance at both the state and federal levels.

In the past five years, for instance, the states have not improved significantly in their IGR performance, especially in real terms. Data suggest that most states’ revenue targets underperform their performance by as much 40 per cent, a trend that has kneecapped the spending power of the subnational unities and made debt funding almost unavoidable.

Last year’s state budget estimates put the composite independent revenue target at N2.64 trillion with Lagos State looking to break the N1 trillion for the first time. The scanty performance data point to a huge underperformance. Lagos State, for instance, has exceeded previous records. Yet, its first half (H1) record points to N800 billion annualised mark.

Many states, even those managed by renowned businessmen, fell far below their self-set targets. For one, Abia State, in its 2023 budget performance, reported N33 billion in revenue, which was 33.3 per cent of its target (N86.4 billion). The state is managed by a former bank managing director, Alex Otti, who many hold in high regard as one of the new breed politicians.

Abia and Lagos are not isolated cases but show typical trends across states. In some cases, revenue performances are 80 per cent below working targets, forcing the majority to live on federation accounts, which accounted for 50 per cent of their retained revenue last year.

In the most recent BudgIt report, only 14 states score 30 per cent and above on the sustainability index.

In the last decade, they have not recorded much progression in actual IGR performances. For instance, since 2019, the sub-national IGRs only grew by 15 per cent in nominal terms – from N1.56 trillion to N1.8 trillion. When discounted for inflation growth and naira depreciation, the real growth of the earnings is in negative territory.


Implementation of the much-expected new minimum wage could force the states to reduce the sizes of their payroll by as much as 50 per cent or worsen the payment default level. A BudgIt survey puts the total number of direct employees in 35 states at 1.176 million as of 2021.

Taraba is not captured in the data published by BudgIt, but an independent finding by The Guardian puts the figure of Taraba public servants at about 23,000. Assuming the average number of the estimated 35 states (33,595) for Taraba, the total number of employees of state bureaucracies could be roughly pegged at 1.2 million.

There are no current data on the subject, but informed observers said the up-to-date figure would be too far from what it was three years ago. A 50 per cent slash in the number owing to the inability to pay could throw as many as 600 million into the labour market and compounds the unemployed level, which was estimated at nearly 40 per cent by the KPMG and the Nigeria Economic Summit Group (NESG) until the National Bureau of Statistics (NBS) introduced a tensely contested methodology that cut the number to five per cent.

Even a 20 per cent cut in the payroll would increase the number of unemployed Nigerians, most of who are breadwinners of their families, by 240,000. But some analysts said the state governors, for political reasons, might retain the number of public employees. That may increase the level of indebtedness at the state level, a situation that would have similar impacts with retrenchment – chief of which is an increase in poverty level.

Already, state governors have dismissed as unrealistic the N62,000 wage floor offered by the Federal Government and the private sector while they came up with their proposals, some of which are a far cry from the demands of the organised labour.

The 36 states have offered an average of N52,000, according to the collation of what the governors considered as an affordable wage floor. At N30,000, Zamfara state offers the least while Rivers state’s N80,000 is the highest.

While the minimum wage discussion is at abeyance, The Guardian reported that President Bola Tinubu would likely settle for between N69,000 and N72,000. Sources from state bureaucrats told The Guardian that the President is not likely going to drift too far from the N70,000 mark.

Apart from the consideration of the sustainability factor, the Federal Government is said to have also come under external pressure – from members of the international financial community and development partners who think that more-than-reasonable top-up in the current wage level would be self-defeating considering the current inflationary level.

Domestic economists have also warned that an unreasonably high wage floor is an invitation to uncontrollably high inflation. An economist, Prof. Femi Saibu said the economy would suffer price shock in two ways – one from higher wage cost and mostly likely higher cost of borrowing that would follow.

A demand-pull inflation would embolden the Central Bank of Nigeria (CBN) to continue its monetary tightening regime, which will feed into the commercial interest rate, which is already way above 30 per cent.

Labour could heed the current warning, abandon the money illusion syndrome and accept the N62,000 offered by employment providers. But that may not stop some states from falling off the fiscal cliff if there are no salary bailouts like the one granted by the CBN a few years ago.

Godwin Owoh, a professor of applied economics and debt management expert, said the governors would need to do away with the notion that “states cannot business” and get involved in revenue-making activities to save their state from insolvency.

“States cannot sit on huge resources as claimed that government has no business in being in business. That is a lame excuse, we must stop. Most states are not viable because the only the majority of governors know how to do is to fly to Abuja to collect allocation. We must begin to interrogate the governors’ entrepreneurial skills when they offer themselves for election. Interestingly, some of them are doing well in their private businesses,” Owoh suggested.

Amid falling or stagnating revenue, governors continue to indulge their states in debt. Though the domestic debt components of the state dropped significantly in the first quarter, from N5.86 trillion to N4 trillion in three months, those familiar with the financial activities said the big elephant is in the components of debt not filed with the Debt Management Office (DMO). These include unpaid salaries, contracts, ‘backdoor’ borrowings from commercial banks and other contingencies that have become a drain on state purses.

https://guardian.ng/states-may-sack-600000-employees-to-implement-minimum-wage/

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Righthussle: 5:34pm On Jul 09
Noise

2 Likes 1 Share

Re: States May Sack 600,000 Employees To Implement Minimum Wage by masterfactor(m): 5:48pm On Jul 09
To pay hard working civil servant na wahala, but if it to allocate billions of naira for senator, money will always be available. A revolution is coming in this country, it's politician I pity for

81 Likes 7 Shares

Re: States May Sack 600,000 Employees To Implement Minimum Wage by turmacs(f): 5:48pm On Jul 09
I hope it'll include politicians

13 Likes 2 Shares

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Brendaniel: 5:48pm On Jul 09
And the blame goes to Tinubu and his supporters...

If you are a worker and you are sacked, remember Tinubu and his supporters caused it, and if you are among Tinubu supporters and they sacked you, well you know what and who caused it...

23 Likes 2 Shares

Re: States May Sack 600,000 Employees To Implement Minimum Wage by STEWpid(f): 5:48pm On Jul 09
Chai..



If truly so, salary increment will be useless.

Because few may enjoy while majority will live in penury.






But since they claim to be spending close to 40% of IGR on personnel, what about the allocations from FG and other sources?

No money to pay salary but they can steal N80b at one instance!!






...also considering the fact that many in the civil service are unproductive and redundant!!



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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Becoted001(m): 5:48pm On Jul 09
Can the government cut down on their expenses and concentrate on increasing the standard of living of the masses? 
which one be the ministry of livestock development when there is already ministry of agriculture.

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by puremaker7(m): 5:48pm On Jul 09
v
Re: States May Sack 600,000 Employees To Implement Minimum Wage by MEGA4BILLION(m): 5:49pm On Jul 09
How many aides and political appointees did they sack to have billions alloted for security vote and still have billions more to loot

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Aremwayne: 5:49pm On Jul 09
It’s time to go the Kenya route if not things will never change in this hell. angry

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Caramia2020(m): 5:49pm On Jul 09
Wahala promax
Re: States May Sack 600,000 Employees To Implement Minimum Wage by mejetov422: 5:49pm On Jul 09
Is that a threat?

Make all the state governors allow the LGA autonomy. Wether them nor go employ more than the 600k people.

My take::

If any state governor can't pay the minimum wage let them resign. Eod

7 Likes 2 Shares

Re: States May Sack 600,000 Employees To Implement Minimum Wage by BigYash: 5:50pm On Jul 09
The fire wen Apc dey arrange go soon catch grin

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Nawa4nl: 5:50pm On Jul 09
Ebola at work

The druglord from the land of flooding wil finish Nigeria

The man emilokan has taken his narcotics infested bad luck nationwide

2 Likes

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Holyfic: 5:50pm On Jul 09
Na wa j
Re: States May Sack 600,000 Employees To Implement Minimum Wage by THilfiger(m): 5:50pm On Jul 09
They spend more on polical jamboree

7 Likes 2 Shares

Re: States May Sack 600,000 Employees To Implement Minimum Wage by BoldBrainz(m): 5:51pm On Jul 09
The Cross River state government has been owing workers gratuities since 2013/2014 and to this very day, no efforts have been put in to remedy the putrid situation. Add disengagement of workers into the mix and the state just might become poorer than Ekiti and Ebonyi states.

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by EngrBoldKay: 5:51pm On Jul 09
Why not sack senators too if that's the case

However, they say what's good for the goose is good for the gander

5 Likes

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Nairashop(m): 5:51pm On Jul 09
After I got sacked in 2021, i learnt a skill, master it and today 2024 nothing concern me with una stipend. I recreate outfits for naija celebrities, see my thread for pictures

1 Like 1 Share

Re: States May Sack 600,000 Employees To Implement Minimum Wage by nitt: 5:51pm On Jul 09
But there's money to pay sit-warmers aka senators & reps 29 million plus naira per month

And there's money to spend 4 billion naira plus on fruitless travels for tinubu in 3 months.

This along with other frivolous expenditure solely for politicians and others.

OK oo!

To say the truth, We all deserve this dire situation we are in, wallahi!.

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by yesloaded: 5:51pm On Jul 09
Re: States May Sack 600,000 Employees To Implement Minimum Wage by haconjy(m): 5:51pm On Jul 09
What Labour ought to fight for is not increase in salary but reduction in federal government spending, cutting short of political office salaries, selling of some luxurious properties and more.

2 Likes

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Nazgul: 5:52pm On Jul 09
If you sack 600k staffs how many would remain?

Nigeria is really sinking.

3 Likes

Re: States May Sack 600,000 Employees To Implement Minimum Wage by specialmati(m): 5:52pm On Jul 09
grin grin grin grin grin grin grin grin grin when you vote a criminal to rule over you.you should always remember he doesn't work with his hands so he won't understand you when you say that things are hard grin grin grin grin grin grin grin .the problem Nigeria have now as a country is that the president doesn't know that they are suffering grin grin grin grin grin grin

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Smartgeek(m): 5:52pm On Jul 09
The masses ALWAYS have to suffer to earn their rights.

But the leaders ALWAYS get exorbitant raise year in year out.

What a country we find ourselves in.

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Max24: 5:52pm On Jul 09
How many politicians were sacked to reduce the humongous budgetary provisions made for them yearly. Has the NASS reduced it's 2024 budget of #344B or reduced it's members? Yeye dey smell. NASS members should be placed on the same minimum wage as the civil servants.

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by Lumig: 5:53pm On Jul 09
Look at the devilish strategy from these guvnors shocked
These guvnors are the main problem of Nigeria

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by AyemafugeILAJE: 5:53pm On Jul 09
Very good
Its God's plan to make Nigerianns suffer so that they can have sense again...
.
God usually make Israelites suffer anytime they lose their sense and start doing evil, wickedness and supporting injustice.....so he will send them to captivity to suffer and be oppresed.

Since majority of Nigerians will not rise up against injustice and evil, especially the elite who enjoy and dines from the table of corruption, it's God's interest to suffer the whole country so that we can again start valuing morality in governance...so that the suffering can make the whole country unite to protest against evil and injustice without tribalism...if not , the suffering go last for years and god wont do anything. See, holy Spirit is inspiring me to write this right now
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Most Christian who will suffer from this regime it is because they were not really faithful, righteous or obedient to God. That's why they will partake until they value wisdom and learn to hear from God....if u hear from God. U won't partake in it
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I became a partaker in the past 3 months because I was disobedient and refused to apply wisdom to plan my money when God miraculously blessed me with 1 million late last year. If I had planned it well with wisdom and obedience, I won't be partaker. But God is already about to show me mercy, very soon....as I'm already seeing the evidence even though my current acct balance is 200 naira. I praise God for hearing my cry and I promise to be faithful, obedient and listen to his instructions by the time he smiles on me very soon based on his promise..


But for others, especially unwise APC Ronu Christians Una go see am....you people needs to go ask for forgiveness from God and repent from supporting evil men....otherwise, the suffering and famine just started....
.
I believe we all deserve this suffering...either for supporting this evil through election or for refusing to protest or for being disobedient, unfaithful and unwise as Christians

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by JAOS(m): 5:53pm On Jul 09
Its like our federal and state government want civil unrest in this country our fuse is getting smaller let them watchout

1 Like

Re: States May Sack 600,000 Employees To Implement Minimum Wage by justmondris: 5:53pm On Jul 09
They should all be Local government secretariat workers. Most of them only go to work at month end to collect salary.

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Re: States May Sack 600,000 Employees To Implement Minimum Wage by Michael547(m): 5:53pm On Jul 09
Wow
Re: States May Sack 600,000 Employees To Implement Minimum Wage by Eriokanmi: 5:53pm On Jul 09
Their governors cum businessmen must first sack themselves. Now, Nigerians are beginning to know who the servants and who the masters are. Soludo thought to govern was like when in cbn when you'd eat .money and nobody would query you. He was the first to have shouted, after the NLC proposed the minimum wage, as if it would affect his business...of course it would.

See Dapo Abiodun too, as if it's only in ogun state that the minimum wage will be implemented . I can understand, every 2nd term in office is an avenue for politicians to loot. They're all restless now over the minimum wage. He needs more loots to further establish hayden petroleum marketing company but that ain't going to happen.

My partner asked me recently that he saw that Nigerians were protesting on CNN over minimum wage and they shut our airports. He asked, were they earning up to 400usd as minimum wage? I said nope, it was actually far less than 100usd and he screamed...what a fuuuuukkk! grin. That's worse than slavering!!!

The masses will learn by force.

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