There are growing concerns that the Federal Government’s commitment to granting its workers an additional ₦35,000 wage for six months is facing a financial hurdle.
Investigations by journalists reveal that the Federal Government may not have sufficient funds to fulfill its initial promise of paying all federal employees, a commitment made when the subsidy on premium motor spirit (petrol) was removed in May 2023.
When President Bola Tinubu signed a memorandum of understanding (MoU) with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) on October 2 this year, he agreed to provide ₦35,000 to each federal government worker, along with a 40% special salary increase, in an effort to offset the impact of the subsidy removal.
While the announcement was welcomed by workers, the NLC expressed some reservations about the awards presented by the Presidency.
However, despite the anticipation of increased payments from the federal treasury, the government lacks the necessary funds to pay all categories of workers within its employ. This financial shortage has been communicated to government agencies, which have been instructed to source their own funds to pay their workers rather than relying on the federation account.
It has been learned that while workers categorized as “treasury-funded staff” have been paid by the government, workers in most departments and agencies that receive their allocations from consolidated revenue funds will not receive payments directly from the federal government. Instead, these affected federal MDAs have been directed to internally source the necessary funds to pay both the ₦35,000 wage award and the 40% special salary increase. This directive has left many MDAs frustrated, as workers prepare to protest the non-payment, similar to their counterparts in ministries.
The Federal Government’s inability to pay all of its workers became evident when the National Incomes and Wages Commission issued a memo on October 19, 2023, instructing government officials and agencies to determine which workers should be paid and which should fend for themselves.
In the memo (reference: SWC.04/T/33), the National Incomes and Wages Commission advised all MDAs funded by consolidated revenue not to expect government allocations to cover the wage award for their workers. Even though most of these agencies do not generate revenue, the memo signed by the chairman and Chief Executive Officer, Mr. Ekpo Nta, instructed them to use their internally generated revenue (IGR) or statutory allocations to cover the costs.
The memo explicitly stated: “I refer to the Memorandum of Understanding reached between the government of Nigeria and the Nigeria Labour Congress, NLC, and the Trade Union Congress of Nigeria, TUC, on Monday, October 2, 2023, as a result arising from withdrawal of subsidy on the price of premium motor spirit and hereby convey the approval of the President and Commander Armed Forces of the Federal Republic of Nigeria for the grant of ₦35,000:00 only per month to all federal workers, with effect from September 1, 2023, pending when minimum wage is expected to have been signed into law.
Accordingly, the implementation of the ₦35,000.00 per month wage award for all federal government ministries, departments, and agencies will be funded from the treasury.
“Non-treasury funded Federal Government agencies are to implement the same from their internally generated revenue, IGR, or statutory allocations.
Enquiries concerning this circular should be directed to the National Incomes and Wages Commission.”
Many of the MDAs tasked with finding the funds to cover the wage award and the 40% salary increase are now puzzled and concerned about the government’s position, as they lack the resources to meet these obligations.
Some workers, speaking on condition of anonymity, expressed shock that the NIWC could overturn the President’s decision to pay all workers without discrimination between “treasury and non-treasury-funded agencies.”
Numerous workers’ unions have already confronted the heads of MDAs, threatening to disrupt operations if prompt payments are not made, mirroring the situation in core federal ministries.
