Federal Government Allocates N24tn for New Minimum Wage Starting April 1, 2024

The Federal Government has earmarked a whopping N24.66tn for salaries, with a new minimum wage set to take effect on April 1, 2024. The Minister of Information and National Orientation, Idris Mohammed, revealed that the current N30,000 minimum wage would conclude by the end of March 2024.

The anticipated wage increase follows the removal of the fuel subsidy earlier in May 2023 by President Bola Tinubu. Initially, the government agreed to pay N35,000 temporarily to mitigate the subsidy's impact, but organized labour insisted on a thorough review in 2024.

Negotiations between the Federal Government and the Joint National Public Service Negotiating Council have commenced, with both parties acknowledging the need for a national wage negotiation committee.

As part of the 2024-2026 Fiscal Framework, the Federal Government plans to allocate 29.18% of its total budgets for the next three years to salaries, overheads, and pensions. This substantial commitment raises concerns about the government's spending habits and fiscal deficits.

Despite the allocation, there are growing worries about the government's over-bloated civil service, prompting calls for agency mergers and restructuring. The 2024 budget has faced criticism in the House of Representatives, with concerns about excessive personnel costs leading to a call for an investigation by the Independent Corrupt Practices and Other Related Offences Commission.

The budget deficit for 2024 is projected to be N9.18tn, partly attributed to the proposed salary review, increased pension obligations, and higher debt service costs. Critics argue that such deficits may impact developmental objectives, leaving limited room for capital expenditure.

President Tinubu has emphasized the exploration of Public Private Partnership arrangements to finance critical infrastructure, acknowledging the government's financial constraints. The House of Representatives urges scrutiny of the budget, emphasizing the need for a balanced approach that benefits the Nigerian population.

The Senate President, Godswill Akpabio, anticipates the passage of the appropriation bill for a second reading, highlighting concerns about high recurrent expenditure and the necessity to avoid economic contraction through drastic spending cuts.

As the nation awaits the outcome of these deliberations, the allocation for the new minimum wage signifies a crucial step in addressing economic challenges and ensuring fair compensation for Nigerian workers