The Association of Local Government of Nigeria (ALGON) has raised concerns regarding the proposed N62,000 minimum wage, warning that its approval could exacerbate the financial strain on local councils.
The Federal Government on Wednesday urged organized labour to consider the broader economic ramifications of their demand for a significantly higher national minimum wage. Minister of Information and National Orientation, Mohammed Idris, cautioned that the N250,000 minimum wage sought by labour could destabilize the economy, lead to mass layoffs, and jeopardize the welfare of Nigerians.
Contrarily, labour unions disputed President Bola Tinubu’s assertion during his Democracy Day address that an agreement had been reached on the new national minimum wage.
Speaking on Channels Television on Thursday, ALGON National President Aminu Muazu-Maifata highlighted the challenges local government administrations would face in meeting the proposed N62,000 minimum wage. Muazu-Maifata pointed out that many of the 774 local government areas (LGAs) in the country are still struggling to pay the 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,” the ALGON president said.
He added, “Presently, 90% of our inflow from the Federation Account goes into salaries and pensions. Without an upward review of the percentage of allocation to local government councils, it will be extremely difficult or even impossible for them to pay N62,000 minimum wage.”
“The 774 local government councils received slightly above 18 per cent of the total FAAC of the federation, while the federal government received above 52 percent.
“Some councils could not even afford the N30,000 and are still working on the N18,000. Whatever is coming from FAAC presently, 90 percent goes into salaries and pensions.
“This tells us that without adjustment and an upward review of the percentage of the allocation coming to local councils, it will be extremely difficult or impossible for local government councils to pay N62,000.”
Muazu-Maifata, who is chairman of Lafia Local Government, Nasarawa State, said if the proposed minimum wage law is approved, local governments would have to turn to governors and the Federal Government for financial augmentation.
He said: “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.”
According to him, councils perform multiple functions beyond salary payments and these obligations should be considered when determining an affordable and sustainable minimum wage.