The Federal Government has revealed that a new minimum wage will be implemented from April 1, 2024, replacing the current N30,000 minimum wage set to expire at the end of March 2024. This announcement was made by the Minister of Information and National Orientation, Idris Mohammed, during an interview in Abuja.
The analysis of the 2024–2026 Fiscal Framework budgets indicates that the Federal Government plans to allocate N24.66tn for salaries over the next three years. This commitment follows the removal of the fuel subsidy on May 29, 2023, leading to the decision to pay N35,000 to each government worker as a temporary measure.
However, organized Labour insists that the N35,000 wage award is temporary, advocating for a comprehensive review of the minimum wage in 2024. The negotiation process has commenced, with discussions centered on the statutory five-year review cycle as per the country’s labor law.
The Nigeria Labour Congress National President, Joe Ajaero, emphasized that the minimum wage review is a legal requirement set to happen in 2024. The Minister of Information and National Orientation, Mohammed, clarified that the improved take-home pay aims to replace the temporary palliative measure introduced to alleviate the impact of fuel subsidy removal.
As the government commits to the new minimum wage, an analysis of the 2024–2026 Fiscal Framework reveals that 29.18% of the total budgets for these three years, amounting to N24.66tn, will be allocated to salaries, overheads, and pensions. The personnel costs are expected to increase by 8.51% from N7.36tn in 2023 to N7.99tn in 2024, with subsequent rises in 2025 and 2026.
Concerns arise over the high personnel costs, with the government facing challenges of managing salaries amid revenue deficits. The fiscal deficit for 2024 is projected to be N9.18tn, partly attributed to salary reviews, increased pension obligations, and higher debt service costs.
The World Bank noted that personnel costs and debt servicing exceeded total revenues in 2022, emphasizing the need for a balance between recurrent and capital expenditures. President Bola Tinubu highlighted the exploration of Public Private Partnership to finance critical infrastructure, addressing the limitations of the federal budget.
The House of Representatives expressed concern about the over-bloated personnel costs in the 2024 budget, urging the Independent Corrupt Practices and Other Related Offences Commission to investigate. The ongoing debate in both the House of Representatives and the Senate reflects the importance of scrutinizing the budget to ensure its effective implementation for the benefit of Nigerians.
