Q. Following the N35, 000 wage raise for federal workers, what kind of salary adjustment is the private sector contemplating for their own employees?
Presently, the private sector has taken a decisive step in implementing a comprehensive financial reward programme. We are actively providing support, both in the form of cash and in-kind allowances, and we have gone the extra mile by adjusting salaries, even in sectors where such adjustments are unconventional. Additionally, we have introduced non-financial measures like facilitating remote work to alleviate the financial strain associated with transportation costs, among other initiatives. This initiative was launched in June and received recognition from the president during his August address, where he commended the private sector for its leadership role in enhancing employee welfare.
Turning to the issue of the national minimum wage, we have proactively addressed this matter and are well ahead in our discussions. It is regrettable that organised labour has not acknowledged or valued the organised private sector’s contributions in these conversations. In our case, we engage in negotiations for minimum wage every three years through collective bargaining agreements. Most private organisations have minimum wages that exceed the national minimum wage of N30, 000. Each sector within the private sector negotiates sector-specific minimum wages that significantly surpass the national benchmark. While we acknowledge the importance of a national minimum wage as a guiding principle, we remain committed to offering wages that far exceed the mandated minimum, despite the challenging environment currently faced by the private sector. Despite the multifaceted and existential challenges, we confront, we continue to outperform others in this environment.
What are the critical areas of focus that organised businesses prioritise?
Our foremost concern revolves around establishing clear and specific timelines for the disbursement of funds. A primary focus for us is how the government intends to address the challenges related to foreign exchange. Presently, the forex situation poses a significant obstacle to procuring essential inputs and is causing disruptions in our financial projections. The escalating forex issue is hindering progress, and until it is resolved, our endeavours cannot take flight.
Regarding the removal of the 7.5 per cent value-added tax, we view it as a measure that should be considered within the broader context of the government’s efforts to alleviate the hardships faced by Nigerians. Eliminating this tax would lead to a reduction in diesel costs, making transportation more accessible for all Nigerians and simplifying diesel-related expenses for both employers and employees. It is not just an intervention geared towards employers; it’s a measure aimed at benefiting all Nigerians. Currently, organised labour, whether in the public or private sector, represents less than five percent of the entire population. Therefore, any intervention should prioritise the welfare of the entire population, considering what immediate relief they can receive. We believe that the removal of the 7.5 per cent VAT on diesel serves as a palliative measure for all Nigerians.
For instance, during the COVID-19 pandemic, employers and organized labour engaged in a Memorandum of Understanding in a bipartite setting, agreeing not to downsize during that period. This was a conversation exclusively between employers and labour, without government involvement. When government or public sector workers become part of the conversation, it transforms into tripartism.
We also supported a conversation between government and organized labour, which resulted in recent developments that occurred last Saturday within the framework of bipartism. However, our concern lies not in the content of the MoU but in the process surrounding it. We believe that getting the processes right is crucial. Just like you cannot build a solid house on a shaky foundation, effective dialogue requires a solid foundation.
If a conversation involves the interests of employers, it’s imperative to include them. Organized labour does not represent employers’ interests, and vice versa. Regarding our priorities, there are specific issues we want the government to address. While we appreciate the temporary removal of the 7.5 per cent VAT on diesel, it may not be at the top of our priority list. No matter what wage award is granted, if we don’t address the sustainability of businesses, the rising costs of goods and services will offset any benefits for employees. This is the reality. The temporary removal of VAT is a positive step to support the private sector, but any relief measures must be accompanied by efforts to enhance enterprise sustainability. It’s essential that the government addresses both aspects simultaneously increasing income and improving production to prevent them from cancelling each other out. Regrettably, the government has not taken both sides into account
