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ALGON Raises Concerns Over Proposed N62,000 Minimum Wage

Written by Jerry Alomatu on June 14, 2024

News Views: 59

Abuja — The Association of Local Governments of Nigeria (ALGON) has expressed significant concerns regarding the proposed N62,000 minimum wage, highlighting the potential strain it could place on local government finances.

The Federal Government, through the Minister of Information and National Orientation, Mohammed Idris, recently cautioned against the organised labour’s push for a higher national minimum wage, warning that the demanded N250,000 minimum wage could destabilise the economy, lead to mass layoffs, and adversely affect the welfare of Nigerians.

Labour Union’s Stance

Contrary to President Bola Tinubu’s claims during his Democracy Day address, labour unions have refuted any agreement on a new national minimum wage. This has fueled ongoing debates on the feasibility and implications of the proposed wage adjustments.

ALGON’s Position

Speaking on Channels Television, ALGON National President Aminu Muazu-Maifata voiced the challenges local governments face with the proposed N62,000 minimum wage. He emphasized that many of the 774 LGAs in Nigeria are already struggling with the current N30,000 minimum wage approved in 2019.

“With the present allocation from FAAC, no local government council anywhere in Nigeria can be able to pay N62,000,” Muazu-Maifata stated. He explained that a significant portion of local government funds—approximately 90%—is currently allocated to salaries and pensions.

Financial Constraints and Allocation

The ALGON president highlighted the existing financial constraints faced by local councils. “The 774 local government councils received slightly above 18 percent of the total FAAC of the federation, while the federal government received above 52 percent,” he noted. Muazu-Maifata also mentioned that some councils are still operating on the N18,000 minimum wage due to financial limitations.

Need for Allocation Review

To address these challenges, Muazu-Maifata called for an upward review of the percentage of allocations from the Federation Account to local government councils. Without such adjustments, he argued, it would be “extremely difficult or impossible” for local governments to meet the proposed N62,000 minimum wage requirement.

Muazu-Maifata indicated that if the proposed minimum wage law is passed, local governments would likely need to seek financial support from state governors and the Federal Government. “We will have to run to our principals, the governors, and the Federal Government to augment whatever will be accrued to local government councils from the Federation Account,” he explained.

Beyond salary payments, local government councils are responsible for various other functions and obligations. These should be considered in any discussions about setting a sustainable and affordable minimum wage, according to Muazu-Maifata.

The debate over the proposed minimum wage continues, with stakeholders weighing the economic implications and the capacity of various levels of government to meet new financial demands.