Coming against the backdrop of ongoing efforts to negotiate a new minimum wage, this year’s celebration has been understandably subdued. At no time in the country’s history has workers faced debilitating challenges as the ones they have had to deal with in the past three years.
First, almost overnight, the value of the naira crashed. From exchange rate of about N192 to one United States dollar, the local currency fell to nearly N500 to the dollar. That ushered the most excruciating and prolonged economic recession this nation has ever experienced.
The already poor salary of workers became almost worthless with the rising inflation, as if that was not bad enough, salaries were no longer paid regularly as many states and local councils and even, the federal government could not cope with the huge drop in revenue distributed among the tiers of government from the Federation Account.
The most profound of the challenges, however, is the unprecedented job losses. In the midst of the pay that could not take any worker home and unpaid salaries in the public sector, over 11 million jobs were lost, mainly in the private sector, according to official figures from the National Bureau of Statistics (NBS).
Despite the economy exiting recession, all the indices of a heavily troubled economy are clear and present. With many people out of work, those with jobs not getting paid and those still with jobs with salaries regularly left with little purchasing power, the economy has been in vicious circle of motion and no movement. Warehouses of manufacturing companies are filled with unsold goods, entrepreneurs are unable to venture into new grounds and those in the distributive sector are equally bogged down by unsold goods.
It is commendable that the federal government has acknowledged that the current pay structure is untenable and cannot take Workers home. However, increasing workers’ pay should not be seen as a cure all. Without a corresponding and well articulated economic programme, merely increasing workers’ pay may worsen the current situation where more than 60 per cent of every tier of government’s yearly budget is devoted to recurrent expenditure.
Nigeria’s economy is still steeped in an inclement environment, one characterised by absence of requisite infrastructure, incoherent economic policy, overbearing political interference, multiple taxes, absence of institutional policy support, banking sector with very high credit structure, security issues among others.
What the country needs is a holistic and fundamental reform of the nation’s approach to the management of the economy. A major factor stultifying the latent energies of entrepreneurial Nigerians is the overbearing influence of government in the policy mix.
In negotiating a new minimum wage, the temptation to insist on uniform and compulsory application across all tiers of government and all sectors should be resisted. For too long, our defective federalism has kept us down with the flawed assumption that federalism equates with uniformity. Every state should be free to negotiate the minimum wage its finances and revenue profile can accommodate.
But more importantly, the government should create the right ambience that will enable Nigerians who are not short of vision and entrepreneurial spirit to harness the opportunities in our environment. Therein is the path to a new Nigeria.