N4.88trn required as FEC approves payment of new minimum wage

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The Federal Executive Council (FEC) yesterday approved full payment of the new minimum wage to Nigerian workers with effect from April 18, 2019.

The approval came just as the ministry of finance, budget and national planning said the federal government would require N4.88 trillion to actualise the payment and other personnel cost during in the 2020 fiscal year.

The meeting which was presided over by the vice president, Prof. Yemi Osinbajo, at the State House, had in attendance heads of ministries, departments and agencies.

Briefing journalists at the end of the meeting, the minister of labour and employment, Dr. Christ Ngige, listed government’s agencies and levels entitled to the new salary adjustment as stipulated in the signed agreement between the organized labour and the federal government.

Ngige said the council also approved the payment of all outstanding financial implications of the consequential adjustments as worked out by the National Salaries, Incomes and Wages Commission (NSIWC), beginning from April 18.

“Today we sent to the federal executive council our report and the conciliation that was done last week between the organised labour and one federal government of Nigeria on the issue of the new national minimum wage which has been fixed at N30, 000 a month and the consequential adjustments,” said the minister.

He said as approved by the council, the payment of the new minimum wage will commence once the “financial implications” have been worked out by the labour ministry.

“So FEC today approved for us that the financial implications worked out by the NSIWC that the salaries adjustment should take effect as from April 18, 2019 the day the New National Minimum Wage Act came into being. Council also approved for us that the financial implication be worked out and the payment should be completed on or before December 2019.

“Council further directed that the minister of finance, budget and national planning through the office of the accountant general of the federation should effect all these payments before 31 December 2019.

“Council further directed also that the NSIWC and the ministry of labour and employment should send the consequential adjustment table down to the states and local government as an advisory document for their information,” said Ngige.

It would be recalled that in the adjustments agreed upon by the labour stakeholders, workers on grade level 07 will henceforth receive a 23.2 per cent increase in their salaries, those on grade 08 will get 20 per cent increase, level 09, 19 per cent; levels 10-14,  16 per cent and levels 15-17, 14 per cent.

Meanwhile, the minister of finance, budget and national planning, Mrs. Zainab Ahmed, has disclosed that the federal government is to spend N4.88 trillion in actualising the new national minimum wage as well as other personnel costs in the 2020 fiscal year.

She disclosed this during a public hearing on the 2020 budget estimates at a joint session of the Senate and House of Representatives.

Ahmed informed the lawmakers of the projected investment of N10.33 trillion in Government-Owned Enterprises (GOEs)/bilateral/multilateral project tied loans/expenditures.

According to her, the proposed budget deficit for 2020 pegged at N2.175 trillion (1.52 per cent of the GDP), would be funded mainly by borrowing of N1.594 trillion, comprising N744.99 billion domestic sources and N850 billion foreign sources (more concessionary financing against commercial financing arrangement.)

On debt service the minister indicated that the Federal Government proposed N2.5 trillion, representing 23.74 per cent of target expenditure for the incoming fiscal year, and N296 billion for the retirement of maturing bonds to local contractors, representing an increase of 169.09 per cent from N110 billion for 2019.

She affirmed that the country achieved 58 per cent of its revenue target in the second quarter of 2019.

She gave the breakdown of the actual revenue that accrued to government’s coffer between January and June 2019, indicating that N900 billion (49 per cent) was from oil; N349.11 billion (86 per cent) from company income tax; N81.36 billion (71 per cent) from Value Added Tax (VAT) while N184.10 billion (100.47 per cent) was from customs collections.

“Fiscal deductions by NNPC for federally funded projects also exceeded target,” the minister added.

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