It has been 11 months past the deadline given to state governments by the Nigeria Labour Congress to commence the payment of the N30,000 minimum wage, however, some states are yet to comply with the agreement. This is indicative that states are in dire straits financially.
BizWatchNigeria learnt that the slow approach by state government in their new minimum wage negotiaition is likely due to the downturn in their finances, which includes federal allocation ang IGR.
The National Bureau of Statistics had in November reported that states’ revenue fell by N180.4bn in the first half of 2020 when compared to the second half earnings of 2019.
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The bureau stated that both IGR and federal allocation to the 36 states and the FCT in the second half of 2019 hit N1.914tn.
However, this figure declined to N1.121tn in the first half of 2020, indicating a 9.45 percent fall totaling N181bn when compared to the preceding half-year revenue generation of the states.
The cumulative IGR of the 36 states and the FCT in the second half of 2019 was N640.3bn, while the total allocation, from the Federation Account Allocation Committee during the same period was N1.274tn, making a cumulative of N1.914tn.
The Governor of Kwara State, AbdulRahman AbdulRazaq at a World Bank forum disclosed that only five or six states were fully implementing the N30,000 minimum wage.
He stated that state governments borrowed funds to pay salaries of workers.
The governor disclosed that his state recorded a deficit of N200m in the November salaries of local government workers, adding that Kogi borrowed N500m for the same purpose, while Niger was able to pay 70 percent.
“Funding the civil service takes away basically all our resources and after that, we have nothing left for anything. So, that’s why you see some state governments resorting to taking loans and bonds and trying to invest in capital infrastructure development,” he stated.
