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Minimum Wage: Buhari, Govs May Clash as FG Sets up Advisory Panel

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  • Minimum Wage: Buhari, Govs May Clash as FG Sets up Advisory Panel

Indications emerged in Abuja on Wednesday that President Muhammadu Buhari might clash with governors if he presented a bill to the National Assembly, proposing N30,000 as the national minimum wage without considering the states’ ability to pay.

Buhari had while inaugurating a Technical Advisory Committee on National Minimum Wage in Abuja on Wednesday said there would be negotiations with workers already earning above N30,000 to help the Federal Government and the states to implement a new wage increase smoothly.

A new proposal of N30,000 is now before the President, which will be forwarded to the National Assembly on January 23 as a bill.

But the governors said they had already told the President the financial crisis the proposed N30,000 minimum wage would bring to their states if approved.

A governor, who spoke on condition of anonymity, told one of our correspondents that the Nigeria Governors’ Forum, as a body, had sent to the President financial analysis of how the increment would affect 30 states.

It was gathered that the governors had earlier submitted a report carried out on six states to measure the impact of the increase in minimum wage from N18,000 to either N22,500, N24,000 or N30,000 on states’ finances.

The governor listed states that were covered in the first report to include “Kebbi, Ondo, Edo, Ebonyi, Bauchi and Plateau.”

It was gathered that some states had agreed to pay more than N30,000 but the governors were said to have collectively said the minimum wage should be pegged at N22,500 in order to help some states that were not financially viable.

Such states, it was gathered, included Kogi, Osun and Benue.

It was gathered that Jigawa State even offered to pay as much as N44,000 if the minimum wage was left at N22,500.

The governor, who spoke on condition of anonymity, added, “So, what we did was to help states that can’t pay N18,000 now to struggle and pay the N22,500 while those paying now should be able to manage the increment without much problems.

“Now, if the President goes ahead to send a bill that will contain N30,000 to the National Assembly without considering what we have told him, there will be crisis in the country. We will wait to see what will happen. I’m sure that the National Assembly will not pass the bill this year.

“I’m also sure that the President may still scale down the minimum wage to what we have agreed to pay or the N24,000 that the Federal Government suggested.

“We will expect the President to appeal to the sensibilities of workers on this matter. If you listened to the President in his interview two days ago, he said that it was better to get the N18,000 than not to get at all.

“In the interview, the President also said he was aware that there were states that owe salaries up to six months.”

We’ll negotiate with workers earning above N30,000 – Buhari

However, Buhari stated that for easy implementation, the government would have to negotiate the wage earned by those already taking salaries above the minimum wage home monthly.

Renowned financial and economic expert, Mr Bismarck Rewane, heads the technical committee, which among others, has the primary role of advising the government on how to implement a new minimum wage, particularly the consequential increases for other categories of workers.

However, for the minimum wage paid the least worker, the President disclosed that there was adequate provision for it in the 2019 budget.

Buhari added, “Therefore, we will be able to meet the additional costs that will be incurred in moving up all personnel who are currently earning below the new minimum wage.

“However, we anticipate that after the new minimum wage has been passed into law, we will be going into negotiations for salary review for all the workers who are already earning above the new minimum wage. It is therefore important that we are properly prepared to meet these demands.

“We must therefore look at ways of implementing these consequential wage adjustments in a manner that does not have adverse effects on our national development plans, as laid out in the Economic Recovery and Growth Plan.”

Rewane panel won’t hinder new minimum wage bill timeline –TUC

Also, the National Chairman of the Trade Union Congress in Nigeria, Kaigama Bobboi, on Wednesday said the Rewane panel would not affect the report of the tripartite committee that deliberated on the issue and its implementation.

The TUC chairman said the 30 days the Rewane panel was given to submit its report would not affect the January 23 timeline for the transmission of the bill to the National Assembly or the N30,000 already agreed on as the new national minimum wage.

He also explained that the proposed negotiation by the FG with those who were already earning above N30,000 was procedural as it was done in 2011 when the present minimum wage was negotiated.

Bobboi said, “The Federal Government has captured the projection in the 2019 budget. What the committee is doing is to ensure the source of the fund… The FG has taken a step by including it in its budget… The state governments will need supplementary budget to accommodate it as the case may be. We do not control the NASS but we are in synergy with them and they have promised to expedite action on it. We will not be surprised if this is done within a month.”

Bring bill on Tuesday, Saraki tells Buhari

When contacted, the Senate President, Bukola Saraki, said the National Assembly could pass the wage bill within one week, before going on recess, only if the Presidency sent it to the legislature by Tuesday.

Saraki’s Special Adviser on Media and Publicity, Mr Yusuph Olaniyonu, said, “The Federal Government should not wait until 23rd January before bringing it. They should bring it on the first day of resumption. If they do so, by the 17th or 18th, work will be concluded on it – within the week.

“We are also interested in it because we are labour-friendly and we want the demand of labour to be met very quickly.”

President alone can’t decide percentage of increment – ASCSN

Responding to the Federal Government’s declaration to negotiate with workers earning above N30,000 per month, the Association of Senior Civil Servants of Nigeria said Buhari would not be the only one to determine the percentage of increment in the proposed review of the minimum wage.

The Secretary-General, ASCSN, Alade Lawal, who spoke with one of our correspondents, said, “What the President is saying is that the minimum wage of N30,000 has been agreed. But consequential adjustment has to be negotiated and he is correct.

“We have submitted a memo and we are going to negotiate it and how it is going to affect other workers earning more than the minimum wage.

“That is the salary review aspect of it, and the President cannot just unilaterally decide it. We have to agree, we have to discuss it with the joint negotiating council because our memo is with them already.

“It has to be done sector by sector. We submitted the memo to the Federal Government in respect of the civil service. So, once this N30,000 minimum wage is agreed, they will invite us and negotiation will start.”

Rewane heads advisory panel on minimum wage

Buhari, however, said the technical committee would advise the government on how to implement the increases for other categories of workers already earning above the minimum wage “in a sustained manner.”

The Rewane committee has members knowledgeable in finance, economy and administration from both the public and private sectors.

The President said the terms of reference to the panel included, “To develop and advise government on how to successfully bring about a smooth implementation of impending wage increases.

“Identify new revenue sources, as well as areas of existing expenditure from where some savings could be made in order to fund the wage increases without adversely impacting negatively on the nation’s development goals as set out in the Economic Recovery and Growth Plan.

“Propose a work plan and modalities for the implementation of the salary increases.

“Any other suggestions that will assist in the implementation of this, and future wage increases.

“Given the urgency of this exercise, the committee is expected to complete its deliberations and submit its report and recommendations within one month today.”

Other members from the private sector are a former Chairman of the Federal Inland Revenue Service , Mrs Ifueko Omoigui-Okauru; Sulieman Barry; Dr Ayo Teriba, and Prof. Akpan Ekpo.

There are also the Chairman FIRS, Dr Babatunde Fowler; Director General of Budget Office, Mr Ben Akabueze, who is the secretary of the committee; representative of the Nigeria Governors’ Forum, Chairman of the National Salaries, Incomes and Wages Commission; Richard Egbule and others representing the public sector.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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