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New Minimum Wage May Push States Into Bankruptcy — NGF Report

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The burden of enforcing the minimum wage could bankrupt numerous states as the country waits for the new rate that President Bola Tinubu has promised to send to the National Assembly.

During its meeting on Tuesday, the Federal Executive Council decided to withdraw a memo regarding the tripartite committee’s report on the new minimum wage. This was done to facilitate further discussions between the federal and state governments, the private sector, and labour unions.

Vice President Kashim Shettima chaired the National Economic Council meeting last Thursday, where Tinubu met with the governors. While the meeting was expected to discuss the national minimum wage, it remained silent on the matter.

The communiqué from the Southern Governors’ Forum, which met in Abeokuta, Ogun State, was also made public last Thursday. In it, the governors requested that each state negotiate a minimum wage with its labour force.

However, the Nigeria Governors’ Forum’s position regarding their excessive influence on the minimum wage negotiations has prompted a response from the labour unions.

In a document, titled, “Analysis of State FAAC inflows and state expenditure profile,” of the Nigeria Governors’ Forum Secretariat, the NGF report warned that implementing the new minimum wage could push states into bankruptcy due to increased recurrent expenditure.

According to the report, the burden of recurrent expenditure already left Abia, Ekiti, Gombe, Imo, Katsina, Kogi, Oyo, Plateau, Sokoto, Yobe, and Zamfara in deficit in 2022.

The report predicted that if the recurrent expenditure increased by 50 per cent, 13 states would fall into deficit, with only 10 remaining financially stable.

The tripartite committee’s recommendation of a N62,000 minimum wage would necessitate over a 100 per cent increase from the current N30,000, potentially leaving only a few states like Anambra, Bayelsa, Borno, Ebonyi, Gombe, Imo, Jigawa, Kaduna, Lagos, and Rivers with positive net revenues, based on the 2022 fiscal data.

A net revenue is the deduction of recurrent expenditure from the total revenue of the state. When it is positive, it means a surplus, but when negative, there is a deficit.

Also, the total revenue of states is calculated from the monthly revenue from the Federal Account Allocation Committee, internally generated revenue, aid and grants, and constituency development funds.

According to the documents, with an employment size of about 58,631 workers, it pays N5,837,899,980.40 as a monthly wage. Anambra has a population of 20,541 and pays N1,824,851,308.96 monthly as wages, apart from N894,480,399.62 as pension obligations and N579,694,680.33 for debt servicing.

Bayelsa boasts a 48,213 workforce, paying N5,802,435,178.58 monthly, with N1,194,528,784.40 as pension obligation and N3,535,787,992.48 as debt servicing, totaling N10,532,751,955.46 as total recurrent expenditure monthly.

Benue has about 13,366 workers in its workforce and pays N2,040,184,471.85 as monthly wage, N76,838,634.62 for pension, and N64,685,126,826.08 for debt servicing, totaling N66,802,149,932.56 monthly.

Delta has about 50,871 workers, offering N8,973,081,853.50 as wages, N1,499,886,303.39 as pension, and N72,417,433,139.00 as debt servicing, accumulating to N82,890,401,295.89 in a month.

Jigawa has about 44,831 workers in its employ and pays N2,795,662,113.02 as wages and N345,987,843.12 as a pension, totaling N3,141,649,956.14 monthly on recurrent expenditure.

Katsina, Kwara, and Niger have 19,062, 36,048, and 22,225 workers, with accumulated N139,294,944,565.27, N4,457,268,675.54, and N2,653,614,213.35 monthly recurrent expenditures, respectively.

According to the document, Abia has a total recurrent expenditure of N111,983,979,958.62, against a total revenue of N147,637,730,867.73.

For Adamawa, the recurrent expenditure stands at N70,369,399,885.57, against a total revenue of N109,722,949,684.65, while Akwa Ibom boasts a high revenue of N444,288,683,000, with a recurrent expenditure of N235,144,539,000.

Of the states, Lagos has the highest total revenue, amassing N1,243,778,878,170 in 2022, with a recurrent expenditure of N621,043,036,000, followed by Delta, with N702,020,717,460.08 and a recurrent expenditure of N377,905,100,451.83.

Rivers amassed N525,588,159,714.88 in 2022, with recurrent expenditure of N186,974,715,774.87; Kaduna had a total revenue of N222,349,875,000 and expenditure of N95,987,999,472.10; Ogun, N297,249,009,626.83, recurrent expenditure of N178,519,010,628.42; and Oyo, with total revenue of N247,156,776,739.70 and recurrent expenditure of N152,077,804,384.65.

Kebbi State had the lowest total revenue in 2022, raking in N92,132,444,588.16 and spending N57,601,464,374.96 on recurrent expenditure, followed by Taraba, with a total revenue of N101,177,283,069.87 and recurrent expenditure of N75,055,201,412.62.

Aside from FAAC allocation, some states recorded poor IGR in the 2022 data compiled by the NGF Secretariat.

Zamfara State generated N6,513,960,477.20, followed by Kebbi with N8,630,767,122.96, Taraba with N9,744,331,840.01, and Yobe State with N9,940,554,642.00.

The IGR of Katsina (N12,821,119,042.64), Adamawa (N13,175,774,969.53), Niger (N14,427,373,136.00), Benue (N15,021,223,729.38), Plateau (N15,927,001,739.90), and Imo (N16,711,346,111.18) also showed poor revenue standing.

The Punch reported on October 19, 2023, that 15 states have yet to implement the N30,000 minimum wage for their workers since it was signed into law in 2019.

According to BudgiT, though the 15 states were yet to implement the minimum wage of N30,000, the 36 states of the federation grew their cumulative personnel cost by 13.44 percent to N1.75 trillion in 2022 from N1.54 trillion in 2021.

The civil society organisation, in a release, ‘The States of States Report 2023,’ highlighted that the 36 states of the federation grew their revenue by 28.95 percent from N5.12 trillion in 2021 to N6.6 trillion in 2022.

“Put together, the IGR of the 36 states appreciated by 12.98 percent from N1.61 trillion in 2021 to N1.82 trillion in 2022, denoting a strengthened domestic revenue mobilisation capability.

“Nonetheless, the IGR to GDP ratio remained very low at 1.01 percent. The increase in IGR did not reflect across the board, as 17 states experienced a decline in their IGR from the previous year, while 19 states recorded positive growth,” BudgIT said.

The Assistant General Secretary of the NLC, Chris Onyeka, claimed in an interview with the News Agency of Nigeria on minimum wage and its implementation that many state governors were flouting the Minimum Wage Act and listed the states of Abia, Enugu, Bayelsa, Delta, Nasarawa, Gombe, Adamawa, Niger, Sokoto, Imo, Anambra, Taraba, Benue, and Zamfara as defaulting.

Reacting, the Enugu State chairman of TUC, Ben Asogwa, said the state commenced payment of the N30,000 minimum wage and its consequential adjustment in February 2020 for state government workers, while local government workers and primary school teachers were paid a 25 percent consequential adjustment.

He, however, said Governor Peter Mbah, on assumption of office, approved the full implementation of the N30,000 minimum wage for both LG workers and primary school teachers in the state.

The Punch reports that the Zamfara State Governor, Dauda Lawal, announced during a meeting with the leadership of the labour unions that the state would begin payment of the N30,000 minimum wage effective June 2024.

BIG STORY

JUST IN: Police Confirm Arrest of ‘Fake’ Agency DG Adeniyi Adeyemi in Osun

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Operatives of the Nigeria Police Force (NPF) have arrested Adeniyi Adeyemi, director-general of the “controversial” Presidential Foreign Intervention Promotion Council (PFIPC).

Abiodun Ojelabi, police spokesperson in Osun, confirmed the arrest to the media, saying Adeyemi was apprehended in the state on Tuesday.

Earlier, a federal high court in Abuja ordered Adeyemi’s arrest after he failed to honour the court’s summons in the alleged forgery case.

The spokesperson of the Osun Police Command, Abiodun Ojelabi, told newsmen that Adeniyi was arrested in his hideout in Osun by the Intelligence Response Team from Abuja. He is likely to be transferred to Abuja later today.

“Yes, it is confirmed. The Intelligence Response Team from Abuja arrested him here in Osun,” Ojelabi said.

A video of the arrest showed Adeyemi dressed in a light blue traditional outfit while surrounded by security operatives.

In the footage, he appeared serious and visibly concerned as he responded to questions from officers.

When asked to identify himself, Adeyemi initially declined to give a direct response.

“I’ve mentioned it, sir,” he said.

The officers insisted that he state his name again.

“Mention it for us, please. What is your name? What is your name?” one of the officers asked.

Adeyemi replied, “I’ve said it several times.”

His arrest came hours after Justice Mohammed Umar of the Federal High Court in Abuja ordered his arrest following his failure to appear for arraignment over alleged conspiracy, forgery and impersonation.

According to the court, the defendant would be compelled to appear and face trial.

The judge subsequently adjourned the matter until September 30, 2026, for arraignment.

Adeyemi’s arrest comes barely a day after he publicly denied reports that he was evading security agencies.

Speaking during an interview on Channels Television on Monday, he had insisted he was not hiding.

“I’m ready to show my face. I’m not hiding. I’m only fearing for my life because I have it on good authority that my life is in danger.

“There have been several attempts on my life.”

He also repeated his allegation that he paid ₦400 million through an intermediary to secure his appointment as Director-General of the disputed council and called for an independent investigation into the controversy.

The police had accused Adeyemi of forging several official documents, including a purported presidential appointment letter allegedly signed by the Chief of Staff to the President, Femi Gbajabiamila, as well as other government documents used to present the council as a legitimate federal agency.

Investigators also alleged that Adeyemi falsely presented himself as the Director-General of the council and operated from an office within the Federal Secretariat Complex in Abuja.

If convicted on the forgery-related charges, he faces up to 21 years’ imprisonment without the option of a fine, while the impersonation charge carries a maximum sentence of three years’ imprisonment or a fine.

 

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BIG STORY

Final South Africa Repatriation Flight to Arrive Lagos Wednesday

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The federal government’s final evacuation flight from South Africa will land in Lagos on Wednesday.

In a statement on Tuesday, Kimiebi Ebienfa, spokesperson of the Ministry of Foreign Affairs, said the flight, operated by Air Peace, is expected to depart Johannesburg with 315 returnees at 1:30 am.

Ebienfa pegged the estimated time of arrival at the Murtala Mohammed International Airport at 6.30 am.

It would be the government’s fifth evacuation flight and the seventh batch of Nigerians to be repatriated from South Africa following the xenophobic violence.

Over 1,000 Nigerians were said to have indicated interest in returning.

The fourth evacuation flight arrived on July 9 with 282 returnees, bringing the total number of Nigerians repatriated from South Africa since the evacuation flights began on June 11 to 1,141.

Bianca Odumegwu-Ojukwu, minister of foreign affairs, asked Nigerians to take advantage of the ongoing exercise to return home.

Odumegwu-Ojukwu’s call came as two more Nigerians were reported dead in South Africa, bringing the official death toll of Nigerian citizens in the country since the latest xenophobic violence to four.

Some repatriated Nigerians have alleged that the figures are higher.

The minister assured that the federal government would ensure that no citizen who expressed interest in returning home would be left behind.

 

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BIG STORY

‘No Immigrant Should Stay in the UK Forever’ — Kemi Badenoch Sparks Fresh Row

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Leader of the UK Conservative Party, Kemi Badenoch, has said immigrants who arrive in Britain on temporary work visas should not automatically be allowed to remain in the country permanently, urging the Labour government to retain its proposed 10-year qualifying period for indefinite leave to remain.

Badenoch made the remarks in a post shared on her X handle on Monday while releasing a letter addressed to the UK’s Home Secretary.

In the post, she criticised calls by some Labour lawmakers for the government to soften its planned immigration reforms.

“People who come to Britain on temporary work visas should not automatically be able to stay forever.

“This Labour government was right to make that harder. Now their MPs want them to u-turn.

“Conservatives will back Labour’s original plan to help get it through Parliament,” she wrote.

The letter, jointly signed by Badenoch and the Shadow Home Secretary, Chris Philp, expressed concern over reports that the Labour government was considering exempting around two million migrants who entered the United Kingdom on work visas between 2021 and the present from the proposed extension of the qualifying period for indefinite leave to remain.

The Conservative leader described such a move as “a grave mistake,” insisting that Britain had previously experienced the consequences of allowing migrants to obtain permanent settlement too quickly.

“As Conservatives learned to our cost, five years is too short a time to obtain the indefinite right to remain in the UK,” the letter read.

She argued that many migrants currently working in low-paid and low-skilled jobs could be replaced by economically inactive British citizens if appropriate opportunities were created.

“Many of these immigrants are working in low-wage, low-skilled jobs which could be done by some of the 9 million economically inactive British citizens,” she stated.

According to Badenoch, migrants who fail to make what she described as a significant economic contribution over a decade should return to their home countries once their temporary work visas expire.

“Individuals who are not making a significant economic contribution over a ten-year period should not be allowed to stay indefinitely. Those not working, or working in low-paid jobs, should be required to go home at the end of their temporary work visa,” she added.

The Conservative leader also argued that granting indefinite leave to remain after only five years would place additional pressure on the UK’s welfare system because successful applicants become entitled to social benefits and can subsequently apply for British citizenship.

“Receiving ILR currently carries full entitlement to receive benefits. Even if this were restricted for an additional qualification period as some have called for, as things stand, the migrants concerned would become eligible for British citizenship a year after receiving ILR, and it would be very difficult to restrict benefits for citizens,” the letter said.

She further noted that there was currently no provision in the Immigration and Asylum Bill or existing legislation that would allow the government to alter welfare entitlements for people granted indefinite leave to remain.

Badenoch maintained that extending the qualifying period from five years to 10 years would not amount to a retrospective change because temporary work visas do not guarantee permanent settlement.

“The government is perfectly entitled to decide at any time the rules on indefinite rights of settlement, including in relation to those here already.

“No one who has come here on a temporary work visa should have the automatic right to stay forever, and changing the rules to extend the qualification period and add conditions for new applications does not constitute a retrospective change,” she wrote.

In the letter, Badenoch also offered the Conservative Party’s support if Labour decides to proceed with its original proposal without amendments.

“If you table the proposals set out last autumn in undiluted form, either in the Immigration Rules or as part of the Immigration and Asylum Bill, we will support them.

“In government we would of course go further, but on this time-sensitive matter we make this offer to cooperate in the national interest,” she stated.

She said the government’s decision on the matter would ultimately show whether Labour was genuinely committed to reducing immigration and strengthening border controls.

“Whether or not you stand by your own proposals is a test of whether the Labour Party is serious about controlling our borders — or not,” the letter added.

The letter was also copied to Andy Burnham, whom Badenoch referred to as the anticipated incoming Prime Minister, as political debate over the future direction of the UK’s immigration policy continues.

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