Seven months after concluding negotiations, the Federal Government of Nigeria has commenced the payment of the newly approved ₦70,000 minimum wage.
This move, which began on Thursday, will benefit over 1.2 million federal civil servants, with the salary adjustments reflected in their September payments.
A directive from the Accountant-General of the Federation, Dr Oluwatoyin Madein, instructed the Budget Office of the Federation to initiate the new payment.
The directive, supported by documents obtained from the National Income, Salaries, and Wages Commission, provided a detailed breakdown of the new annual earnings for civil servants under the Consolidated Public Service Salary Structure.
Breakdown of New Salaries
The new wage structure varies by grade level. For instance, Grade Level 1 officers will now earn ₦930,000 per annum, with the salary increasing to ₦934,160 for Grade Level 2 officers and ₦937,713 for those on Grade Level 3. Similarly, those on Grade Level 4 will earn ₦950,243, and Level 5 officers will receive ₦973,123 annually.
As the levels increase, so do the salaries. Grade Level 7 officers, for example, will now receive ₦1,277,667 per year, while Grade Level 10 officers will earn ₦1,806,041. Senior officers on Grade Level 12 will see their annual salary rise to ₦2,007,152, and the highest-ranking civil servants, on Grade Level 17, will now take home ₦6,918,560 per year.
The document also outlines salary step increments for each level, showing how payments will progress as officers move up steps within their respective grades.
For instance, a Grade Level 1 officer on step two will earn ₦935,585, while someone on step three will earn ₦941,173, and so on up to step 15, where the salary reaches ₦1,008,209.
Commencement of Payments and Adjustments
Confirming the new salary structure, Bawa Mokwa, Director of Press at the Office of the Accountant-General of the Federation, stated that payments began on Thursday, although no information was available regarding arrears. A civil servant who spoke anonymously confirmed that some employees had already begun receiving the new salary alerts.
The new minimum wage covers various sectors, including Ministries, Departments and Agencies (MDAs), Armed Forces, Paramilitary units, and tertiary institutions such as Federal Universities, Polytechnics, and Colleges of Education. In total, 1,236,824 workers are affected by this adjustment.
The implementation date for the new wage structure was agreed upon in July 2024, following negotiations with the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC).
President Bola Tinubu signed the new wage law on July 29, 2024, setting that date as the official start of the implementation.
Significant Financial Impact
The Accountant-General’s office revealed in a letter dated September 24, 2024, that the government will be spending ₦334.93 billion monthly to cover the wages of over 1.2 million employees. This translates to a total annual wage bill of ₦4.019 trillion.
The implementation of the new wage policy has prompted the Federal Government to boost revenue allocation.
In August, the government transferred ₦200 billion into the non-savings account during the Federal Accounts Allocation Committee (FAAC) meeting, increasing the total to ₦595 billion.
Labour Leaders and Civil Servants React
Labour leaders from the Nigeria Labour Congress and Trade Union Congress have urged other employers, particularly in the private sector, to follow the government’s example by implementing the new minimum wage.
Benson Upah, spokesperson for the NLC, expressed approval of the government’s actions, stating that other organisations should emulate this step.
Similarly, TUC’s Deputy President, Tommy Etim, emphasised that no employer has grounds to delay the payment, given that the government has already issued a template for the salary adjustments.
However, some civil servants remain dissatisfied with the new pay scale. A Grade Level 12 officer expressed disappointment, describing the increase as insufficient given the current economic hardships in the country.
The officer stated, “This salary increase is too small compared to what we have faced in the last year. I think we have been deceived.”
Meanwhile, pensioners in the Southwest have maintained their demand for a ₦250,000 minimum wage.
They argue that the current economic realities, particularly the rising cost of fuel, make the ₦70,000 wage insufficient.
The Nigeria Union of Pensioners (NUP) in the Southwest has called for the government to revisit the wage structure, insisting that labour should negotiate for a more realistic minimum wage in light of escalating living costs.
Private Sector and Economic Concerns
There has been significant debate about the new wage structure’s impact on the private sector, particularly small businesses.
Some private sector leaders have raised concerns over the government’s threat to jail companies that fail to comply with the ₦70,000 minimum wage.
Dr Ikenna Nwosu, a facilitator with the Nigerian Economic Summit Group, argued that without proper legal frameworks, it is unlikely anyone would face imprisonment for non-compliance.
He also noted that the Federal Government lacks the authority to enforce minimum wage regulations on all private businesses, many of which may struggle to meet the new payment requirements due to Nigeria’s economic climate.
While some larger manufacturers were already paying wages above ₦70,000, smaller businesses are finding it increasingly difficult to cope.
Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), highlighted that while manufacturers support higher wages, many small businesses might be forced to downsize or close shop entirely if they cannot meet the new wage demands.
Looking Forward
Despite these challenges, manufacturers and business owners remain hopeful that the government will offer support to those struggling to pay the new wages.
Ajayi-Kadir suggested that relief or incentives could help businesses stay afloat while complying with the new policy.
He added that a higher minimum wage would ultimately benefit the economy by increasing consumers’ disposable income, which in turn could boost sales for manufacturers.
Nonetheless, the debate around the ₦70,000 minimum wage continues, with labour unions, civil servants, and business leaders each voicing their concerns about the economic impact and sustainability of the new policy.
