FRESH THREATS TO WAGE DEAL

By NBF News
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President Goodluck Jonathan
In line with their argument that they could not cope with the new minimum wage regime without more money in their coffers, Nigerian governors have asked for their share of the federal allocation to be increased by 55 per cent.

The governors at their meeting in Abuja on Wednesday decided that they required 42 per cent of the federal allocation as against the current 26.70 per cent.

The governors, THE PUNCH had gathered, met with President Goodluck Jonathan on Wednesday and presented their demand which they said must be approved before they could implement the Minimum Wage Act fully in the states.

THE PUNCH reported exclusively on Wednesday that the governors met in Abuja and decided that they would not pay arrears of salaries to senior civil servants under the new Minimum Wage Act, contrary to the deal they made with organised labour on the basis of which the threatened three-day warning strike was called off at the last minute on Tuesday.

A kernel of the government-labour deal is that the full implementation of the Minimum Wage Act will commence on August 1 and that arrears from March, when the law came into existence, will be paid to all cadres of workers in the civil service.

Currently, the Federal Government takes 52.68 per cent of the federal revenue while states and local governments take 26.72 and 20.60 per cent respectively.

But in the new sharing formula the governors presented to the President, the Federal Government's share of the federal allocation will drop to 35 per cent while the local government takes 23 per cent.

The governors, in the report of their meeting signed by the NGF chairman and Governor of Rivers State, Mr. Rotimi Amaechi, said the review of the current federal allocation formula enacted in 1982 had become imperative since the constitution imposed more responsibilities on the states. The report, which was obtained by The Punch, also states that what the states are getting from the national purse at present is inadequate to deliver on the key sectors, including education, agriculture, housing and infrastructural development.

They also noted that the non-performance of the Federal Government in the discharge of its constitutional responsibilities imposed on the states the burden of filling the vacuum created in their states.

'The recent passing of the Minimum Wage Bill would undoubtedly raise the wage profile of the states far beyond their means and abilities,' they also said.

The governors also accused the Federal Government of denying the states of revenue centrally collected from stamp duties and the income tax of members of the armed forces and police, which they said were supposed to be fully remitted to states of residence on the basis of derivation as provided under Section 163 (b) of the 1999 Constitution.

They also noted that 'rather than getting their funding from the Federal Government which is constitutionally responsible for them, federal tax agencies deduct their cost of collection at source, thereby reducing the amounts available for allocation to other tiers of government.'

They therefore demanded 'the devolution of more authorities and resources to states and the Local Governments in order to improve responsiveness, ensure greater impact of government policies and initiatives on the priorities and needs of the citizens and ultimately improve economic and human development,' a desire which they said further necessitated the need for the review of the revenue formula.

The demand for 42 per cent of the federal allocation was apparently in tandem with the outcome of the committee set up by the NGF to collate the views of member states and generate proposals for an appropriate revenue formula for the country.

The committee was headed by the Governor of Lagos State, Mr. Babatunde Fashola (SAN).

Meanwhile, details of the agreement between the governors and organised labour on Tuesday night indicated that civil servants in the 36 states of the federation are to earn different salaries based on the peculiarities of each state.

The agreement, a copy of which was obtained by our correspondent, is titled 'Agreement between the Nigeria Governors' Forum and the Labour Movement represented by the NLC and the TUC in Implementation of the National Minimum Wage of N18,000.00.'

It reads, 'The 36 states of the Federation agree to comply with the new National Minimum Wage (Amendment) Act, 2011.

'The states shall conclude negotiations with labour on the implementation of the new minimum wage not later than July 13, 2011.

'Detailed negotiations on salary across board will be done with a view to effecting payments by August 2011, while modalities for payment of the minimum wage will be worked out according to the peculiarities of each state.

'The 36 states agree that the effective date for the implementation of the new minimum wage shall not be later than August 1, 2011 provided that any worker who earned less than N18, 000.00 between 1st April and the effective date of the implementation of the new minimum wage shall be paid arrears of the difference.

'The time frame for the payment of the arrears of the difference of the new minimum wage effective April 1, 2011 shall not be later than October, 2011.

'In the face of the commitment by the governors, labour resolves to suspend the three-day warning strike called for this week in the states.'