The Federal Government on Thursday said a new minimum wage regime would come into effect on April 1, 2024.
The Minister of Information and National Orientation, Idris Mohammed, who disclosed this in an interview in Abuja said the current N30,000 minimum wage would expire at the end of March 2024.
Mohammed said this on Thursday as an analysis of the 2024 –2026 Fiscal Framework budgets by our correspondents indicated that the Federal Government would spend N24.66tn on salaries in 2024, 2025, and 2026.
The Labour unions on Thursday confirmed that they had started a negotiation process with the Federal Government, adding that based on the country’s labour law, the minimum wage should be reviewed every five years.
On his part, the Minister of Information and National Orientation, Mohammed, said that the improved take-home pay was meant to replace the temporary palliative measure put in place by the government to ameliorate the hardship caused by the fuel subsidy removal.
He said, “Certainly, there is a new wage regime that will come in on April 1, 2024. That is why these palliatives were targeted so they would cushion economic hardship before then. In our negotiation with Labour, we said that the wage issue was not something one could just fix. A committee that will also involve Labour itself will work on it.
“The committee is being constituted and we are talking to Labour about it. And by the time this current wage regime expires by the end of March, we will expect that a new wage will begin by April. It is in this wage regime that we will now have a proper salary structure for workers across the length and breadth of Nigeria. We expect that the private sector and state governors will also do the same.”
The Federal Government has about N1.5 million workers and it will review minimum wage by 2024. There are concerns that the government is operating a bloated civil service with many agencies with overlapping functions. This has led to calls for agency mergers and scrapping, where they might apply.
With salaries weighing heavily on its spending, the government, in its 2024 – 2026 fiscal framework, said, “The budget deficit is projected to be N9.18tn in 2024, i.e., N4.6tn down from N11.60tn budgeted in 2023.
“The proposed deficit represents about 50 per cent of total Federal Government’s revenues and 3.88 per cent of the estimated GDP (Gross Domestic Product ). The high projected level of fiscal deficit in 2024 is partly attributable to the proposed salary review of Federal workers across board, increased pension obligations, and higher debt service cost.
“At 3.88 per cent, the projected level of deficit is higher than the three per cent threshold stipulated in the Fiscal Responsibility Act (FRA), 2007, but significantly lower than the 2023 level of 6.11 per cent; FRA 2007, however, allows the government to exceed the 3 per cent threshold if justified by threats to national security.”
The fiscal deficit for the three years under review is expected to total N30.89tn. In June 2023, the World Bank disclosed that the Federal Government’s spending on personnel costs and debt servicing exceeded total revenues in 2022.
