By Abiola Olawale
The Nigeria Governors Forum (NGF) has once again expressed its concerns on the implications of implementing a high new minimum wage.
The NGF in a report said about 26 states including Oyo, Ogun, Kaduna, Kano, Abia, Osun, Enugu, and others may face the risk of bankruptcy if a minimum wage of N62,000 is enforced.
In a document, titled, “Analysis of State FAAC inflows and state expenditure profile,” of the Nigeria Governors’ Forum Secretariat, the NGF cautioned that the implementation of the proposed N62,000 minimum wage may lead to a rise in recurrent expenditure, which can potentially drive several states towards financial insolvency.
Analysis of the report has revealed that states such as Abia, Ekiti, Gombe, Imo, Katsina, Kogi, Oyo, Plateau, Sokoto, Yobe, and Zamfara are currently experiencing financial deficits due to the burden of recurrent expenditures.
Also, in the report, the NGF predicted that if the recurrent expenditure of the 36 states of the Federation increased by 50 per cent, 13 states would fall into deficit, with only 10 remaining financially stable.
According to the report only states like Anambra, Bayelsa, Borno, Ebonyi, Gombe, Imo, Jigawa, Kaduna, Lagos, and Rivers can potentially remain financially stable.
Further breakdown of the report revealed that Abia, with an employment size of about 58,631 workers, pays N5,837,899,980.40 as wage monthly. Anambra has a 20,541 employment size and pays N1,824,851,308.96 monthly as wages, apart from N894,480,399.62 as pension obligation and N579,694,680.33 for debt servicing.
Bayelsa boasts of 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, totalling 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, totalling 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, totalling 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 expenditure 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 of a high revenue of N444,288,683,000, with 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 spent 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, 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 a poor revenue standing.
The New Diplomat reports that the discussion on a new minimum wage is still ongoing as Federal Executive Council, at its meeting last Tuesday, stepped down a memorandum on the report of the tripartite committee on the new minimum wage, to allow for more consultations among the federal and state governments on one part, the private sector and the labour unions on the other part.
