GOVERNORS' FORUM AND POLITICS OF MINIMUM WAGE
The Nigeria Governors Forum stirred the hornet's nest last week when it called for the removal of petroleum subsidy as a pre-condition to paying the 18, 000 minimum wage to workers in its employment. Several State governors have been on war path with their state branches of the Nigeria Labour Congress(NLC) over the implementation of the minimum wage recently enacted by the National Assembly at the twilight of the sixth session of the Federal Legislature.
Besides the call for the removal of petroleum subsidy, the Governors Forum also wants a review of the revenue allocation formulae before states can pay the new minimum wage. The forum says the current revenue sharing formula is lopsided in favour of the Federal Government. The Federal Government currently takes 52 per cent while the 36 states and 774 local governments share 26.72 per cent and 20.60 per cent respectively.
The NGF at its last meeting adopted the report of ad-hoc committee it had earlier set up to recommend a new revenue sharing formulae. The committee headed by Lagos State governor, Babatunde Fashola, had recommended that Federal Government , state and Local Governments should get 35 percent, 42 percent and 23 percent respectively in the proposed revenue sharing formulae.
Expectedly, the NGF position, especially regarding the removal of petroleum subsidy, which was made known by its chairman and Governor of Rivers State, Mr Chibuike Amechi has not gone down well with the populace especially the NLC. The reason for this is not far-fatched. The issue of removal of petroleum subsidy has been a sore point in the relationship between the Federal Government and the organised labour. Previous attempts by the government to remove the subsidy on petroleum products had always been greeted by protests by the NLC and the civil society.
According to Amechi, funds that hitherto go into subsidy should be plunged back into the federation account and shared among the various components of government, so as to make more funds available to the states.
Not a few think the governors position is antithetical to welfare of Nigerians. Surprisingly, the governors position is coming few weeks after they secured the peoples votes. During the campaigns, the governors had made promises to the electorate, A Labour Party chieftain in Edo State and former Chief of Staff to the former governor of Edo State, Mr Isaiah Osifo told Daily Sun in an interview that NGF position on the removal of petroleum subsidy is motivated by selfish considerations.
He said they do not need the removal of the petroleum subsidy to pay. According to him, if the states manage their resources very well, they will have enough to pay the new minimum wage without the removal of the petroleum subsidy. Osifo contended that ' It is not the amount that is significant, but the management of the resources at the disposal of the governors that is significant. After all the budget that was put in place last year was done on the benchmark of 47 dolars per barrel. But now a barrel goes for over 100 dollars. So what has happened to the surplus.
It is not removal of subsidy that is the matter but the management of what is available. If a budget is packaged on the basis of 47 dollars per barrael and you are now selling at a hundred dollar, so you have made more than 100 percent of what you anticipated.' He added that the subsidy can remain as the nation's assistance to the down trodden. 'That is why you have tax rebate in advanced countries. There is no country that does not have welfare programme to take care of the vulnerable. There are always the vulnerable in all the society, and a responsible government can always put in place policies that will take care of this vulnerable. If we are making surplus revenue from oil sales , that surplus is enough to install a micro-economic set up that can retain the subsidy for the interest of the vulnerable.'
Statistics from the Petroleum Product Pricing Regulatory Authority (PPPRA) indicates that, the Federal Government subsided petroleum products to the tune of N621.5 billion last year. Kerosene is subsided to the tune of N111.01k per litre. Daily consumption is eight million litres. The pump price is N50 per litre. It costs N161.01 per litre to get it to the filling station.While the agency's pricing template for June, 2011 shows that a litre of petroleum product is subsided with N81.
The implication of this is that if the subsidy is removed as the governors are championing, the pump price for fuel would cost as much as 147 per litre. While Kerosene would go for as much as 161 per litre.
The President-General of the Trade Union Congress, Mr Peter Esele aptly captured the the implication of the removal of the subsidy on petroleum product , in a recent interview with a national daily.
'What they (governors) want to create is chaos. When you pass a law, are you giving a condition for its implementation? We have passed the stage of negotiation; if they had said that during the negotiation, it would have been in order because we could negotiate. But now, the National Minimum Wage Act has to be respected,' Esele stated. He added that 'The National Minimum Wage is a law. They have to respect the law by implementing it; otherwise they would be seen as not respecting the law. We will do everything to ensure the implementation of the National Minimum Wage.'
Analysts believe that instead of the Governors Forum calling for the removal of petroleum subsidy, it should redouble its efforts and its agitation for a new revenue sharing formula that would put more money at the disposal of the states. This is because of the tension the removal of subsidy would cause in the polity coupled with the untold hardship that it will engender. It was the long drawn struggle against the removal of petroleum subsidy by the organised labour that made Edo State governor, Adams Oshiomhole very popular as NLC President. It is doubtful if the present leadership of the union would abandon the struggle just so soon.
Already, the NLC has given indication that it will not allow the proposal to sail through. Responding the Governors call, the NLC Deputy President, Comrade Promise Adewusi said the labour union will oppose it with every weapon at its disposal. 'We don't begrudge them for asking for increase in their revenue allocation formula. It is an act of laziness and lack of creativity. But we won't allow them to inflict more pain on Nigerians because they want more money. Insecurity in the country is as a result of poverty. Now, they want to compound people's problems by removing fuel subsidy. We will stop them by all means possible,' he stated recently.
The NGF has overtime metamorphosed from a mere assemblage of state governors to a very strong pressure group. In the recent past, whatever the governors set their mind on, they achieve. On the other hand, the organised labour has been very vehement in its opposition to the removal of the subsidy on petroleum products. If the Federal Government hearkens to the all powerful Governors Forum and remove the subsidy on petroleum products, the stage obviously will be set for the mother of political cum economic battle. It may just be one battle the NGF would never win.