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Minimum Wage – Why Buhari Constituted Technical Committee – Udoma

Minimum Wage – Why Buhari Constituted Technical Committee – Udoma

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The Minister of Budget and National Planning, Udoma Udoma, has said the technical committee constituted by the federal government is not to review the work of the previously constituted tripartite committee.

Rather, he said, the committee was to identify additional sources of revenue to help the government meet the increased costs it would encounter implementing the new minimum wage.

Last Wednesday, President Muhammadu Buhari inaugurated the committee headed by the Managing Director/Chief Executive Officer, Financial Derivatives Limited, Lagos, Bismark Rewane.

Other members of the committee include representatives of the private sector and some key government agencies, namely former Chairman of the Federal Inland Revenue Service (FIRS), Ifueko Omoigui-Okauru, Director General West African Institute for Financial and Economic Management (WAIFEM), and CEO, Economic Associates, Ayo Teriba.

Others from the public sector include the Chairman of FIRS, Babatunde Fowler; Director General of Budget Office, Ben Akabueze; Chairman, National Salaries, Incomes and Wages Commission, Richard Egbule; Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse; Solicitor General of the Federation and Permanent Secretary, Ministry of Justice, Dayo Apata.

The committee also has the Special Adviser to the President on Economic Matters, office of the Vice President, Adeyemi Dipeolu; Deputy Governor of the Central Bank of Nigeria in charge of Economic Policy, Joseph Nnanna; Accountant General of the Federation, Ahmed Idris, and Director General, Debt Management Officer, Patience Oniha, as members.

Since the president, during his presentation of the 2019 Budget to the National Assembly late last month, announced government’s plan to constitute the technical committee to help in working the modalities for the implementation of the national minimum wage, the Nigerian Labour Congress (NLC) had kicked against the idea.

The NLC President, Ayuba Wabba, said the arrangement was unacceptable, as workers were not going to be party to any other decision outside the resolution of the tripartite committee that agreed on N30, 000 as the new national minimum wage.

But, in an interview with editors in Lagos on Saturday, Mr Udoma said the technical committee was not to review the work of the tripartite committee.

He said the committee was to identify additional sources of revenue to help the government meet the increased costs implementing the new minimum wage without affecting its ability to discharge other obligations, particularly to ongoing infrastructure development plans.

“Whenever a new minimum wage bill is enacted, there are likely going to be demands for some wage increases, even from those already earning more than the new minimum wage. All these salary increases will impose additional costs on government,” Mr Udoma said.

He said the committee is expected to make suggestions as to how government can raise additional revenues to meet its expenditure on other services, such as education, health, infrastructure, and other important functions, after paying the increased salaries.

“The committee is expected to, amongst other things, look at how to get additional revenues so that as our wage bill goes up, we are able to increase our revenues to spend on capital projects, and our commitment on basic infrastructure, health, education, and others are not reduced.

“In short, the committee is to advise the government on ways to ensure that notwithstanding the increase in payroll costs, there will continue to be adequate funding for other government activities. This is not just for the 2019 fiscal year, but going forward, thereafter,” he said.

On budget deficit, the minister said the government was proposing to cut it down from the N1.95 trillion projection in the 2018 to N1.895 trillion in 2019.

He said this was about 1.3 per cent of Gross Domestic Product (GDP), which is within the 3 per cent threshold set by the Fiscal Responsibility Act.

Although the minister noted Nigeria does not have a debt problem, he said there was need to optimise the country’s revenue generating potentials and ensure the country’s debt service was brought down in relation to her revenue ratio.

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