FG Faces N315bn Increase In Wage Bill Amidst Nationwide Strike Suspension

President Bola Ahmed Tinubu

Eko Hot Blog reports that the Federal Government of Nigeria could incur an additional N315 billion in the next six months due to the newly introduced allowance for federal workers.

This revelation follows a marathon meeting between the Federal Government and Organised Labour, where a Memorandum of Understanding was signed, leading to the suspension of the proposed nationwide strike for 30 days.

The resolution, announced by the Minister of Labour and Employment, Simon Lalong, stated that the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) had agreed to suspend the planned indefinite nationwide strike, scheduled to begin on October 3, 2023. The signed memorandum is set to be filed with the relevant court within a week as a consent judgment by the Federal Governmen.

Memorandum of Understanding Signed by both Federal Government and Labour Unions

Under the terms of the agreement, the Federal Government grants a wage award of N35,000 to all Federal Government workers starting from the month of September. Additionally, the agreement outlines the inauguration of a minimum wage committee within one month and allocates N100 billion for the provision of high-capacity Compressed Natural Gas (CNG) buses for mass transit in Nigeria. Plans are underway for an auto gas conversion program, with the aim to commence by November.

However, this development has sparked concerns regarding its reach. The National Bureau of Statistics reported that only about 11.8 percent of working-age Nigerians were engaged in wage employment in the first quarter of 2023. The N35,000 monthly allowance, which will be provided to approximately 1.5 million federal workers, is expected to cost the government N52.5 billion monthly, totaling N315 billion over six months.

Furthermore, amidst the ongoing discussions on subsidies and palliatives, there is a growing call to focus on urban poor communities. The removal of the fuel subsidy has significantly impacted these individuals, making daily life challenging. Experts emphasize the need for targeted support to alleviate the burden on those most affected by these policy changes.

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Akande Ismail Abiola