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Minimum wage mirage: Kano faces reality

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Kano man, 40, dies inside river

“We can’t pay full March salary over drop in allocation.” Malam Muhammad Garba, Kano State Commissioner for Information.

By Dele Sobowale

On April 5, 2021, the Kano State Government bravely led the way by being the first to announce that it could not pay workers their salaries. Politicians being what they are, the government said the set-back was temporary to cushion the blow. Governor Ganduje has not sent me on an errand; but, Kano State is my second home. I spent more years working and living there than any other state apart from Lagos.

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 Let me be the first to announce, not only to Kano public servants, but to all of them that the Next Level will now lead to more states failing to pay their workers. It was destined to happen.

“Any policy which does not make economic sense will eventually fail”. That was verdict of economic-history as delivered by one of its leading scholars. I had kept that judgment to heart since 1965-6. Each time any government announces a scheme with a price tag to it, the first thing I do is to run some figures to determine whether the proposal is viable or not. Frequently, in Nigeria, most pronouncements by Presidents and Governors are hogwash – not to be believed.

  “Every government is run by liars; and nothing they say should be believed.”

I.F Stone, 1907-1989, US Columnist.

He published I.F Stone WEEKLY   in the US until 1971 which was one of my must-read publications then — when it did not cross my mind I will ever become a columnist. His disrespect for governments was most arresting. He contributed that statement to my book. Never again since   Stone would any government take me for a ride. I know they are untruthful before they talk. 

The report of the new Minimum Wage in May 2019 with instructions for “immediate implementation” induced me to write a letter to two Governors in the South West warning about the dangers ahead. Let me share part of the letter with readers if not for any other reason than to expose how hollow the call by Presidents and Governors is. 

They often don’t mean what they say. Here is the warning made in 2019.

There is an important national issue – Minimum Wage – which needs to be handled carefully by  all  the governments of the Federation to avert dire economic consequences.

 I am happy that you represent the two major parties. That Minimum Wage represents potential danger to every state – including those assuming that they can pay at the moment. Four major reasons account for that declaration.

1.Timing is wrong. This year, the nation faces a drastic reduction in crude oil revenue which is the critical factor in the ability of the FG and states to pay the new minimum wage and still discharge other responsibilities to their people.

 States now spending close to 70 per cent of their revenue paying salaries will need to borrow just to cover the new payroll bill. How can that be possible when crude oil revenue sharply declines? Most states are drowning under huge debt repayment already without this albatross around their necks.

2.Virtually all institutions and organisations worldwide – World Bank, IMF, World Poverty Clock, Fitch etc — acting independently and appraising the prospects for Nigeria’s Gross Domestic Product, GDP, this year have arrived at the same conclusion. 

Nigeria’s GDP will grow by less than 2.5 per cent. That means lower per capita income and deepening poverty. That also precludes possibility for states to increase their Internally Generated Revenue, IGR, significantly to help pay the increased bill.

3 Nature is not kind to us this year. Delayed rains will inevitably result in poor food harvest. I know that from what is happening in my farm. Governments will be better advised to anticipate demands for food donations from starving Nigerians late this year and early 2020. Herdsmen have not helped either.

4.Heightened insecurity nationwide means only one thing – governors will be called upon to spend more on combating crimes in their states on a scale never before experienced in this country.

  “If gold rusts, what then will iron do?” Geoffrey Chaucer, 1342-1400.

  The letter was sent by DHL to Governors Fayemi and Makinde of Ekiti-APC and Oyo-PDP respectively. Neither of them   acknowledged receipt of the letter. Yet, I acted in the belief that the two were among the most enlightened of our leaders. Three letters written to one Governor and two Senators in the USA were promptly answered despite my not being a US citizen. The difference is clear.

  States are in the predicament predicted in private to the two governors. I actually had a proposal to help governors of all   states minimise the maximum wage fall-out. But, you can only talk to people whose ears are open. From all appearances, it might be better to go and talk to a wall than a Nigerian governor. Kano is   better than several states in this regard. So, if the richest state in the North is catching cold, the rest are almost dying of pneumonia on this matter.

  “Truth is constant.” Kano is among the top six in federal allocation to states. Its monthly revenue from that source is almost equal to those of Plateau, Gombe and Nasarawa states combined. Yet, a group of senseless individuals have decreed that all the states must pay the same salaries to everybody from Governor to Gateman. In no other federation in the world is this the practice. To make matters worse for the governments of poor states, those negotiating on both sides take their bearings from prices of goods and services in Lagos and Abuja. To listen to many Labour leaders, rent is the same in Lagos and Langtang; food costs the same in Abuja and Aba and there is traffic jam everywhere resulting in high transport charges. We all know these are not true reflections of the situations we experience. But, lazy negotiators start from those faulty premises and go on to arrive at wrong conclusions.

Labour representatives are particularly guilty of selfishness. What they rake in is a function of what they get states to pay – irrespective of whether it is sustainable or not. They don’t care about the wide disparities in the abilities of states to pay. They blackmail politicians to obtain dodgy concessions. The agreement of 2019 is unravelling right now. Kano is only the beginning.

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