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20 States Cut 2020 Budgets By N733bn Despite Minimum Wage Agreement

Despite the agreement on the payment of N30,000 minimum wage in 2020, an analysis by Daily Trust shows that 20 states have reduced their 2020 budgets.

The federal government and labour had on October 18 announced an agreement on the implementation of the new wage.

The agreement over consequential adjustments averted a strike that labour had threatened to call should government further delay the take-off of the new minimum wage.

The battle for the full implementation of the new minimum wage has moved to the states following the federal government’s conclusion of negotiations on consequential adjustments of salaries of higher income earners with the Joint National Public Service Negotiating Council.

Under the agreement, workers on salary Grade Level 07 received 23.2 per cent pay rise; those on GL 08, 20 per cent; and GL 09 got 19 per cent. Officers on GLs 10 to 14 got 16 per cent hike and those on levels 15 to 17 got 14 per cent upward review. Together with the consolidated salary structures of universities, polytechnics and colleges of education, the federal monthly wage bill currently stands at N611 billion.

Similarly, a directive has been given to ministries, agencies and departments to ensure that arrears of the new wage regime, from April when the Act came into effect, be cleared before the end of December.

Data generated by our reporter indicated that 19 states and the FCT cumulatively reduced their 2020 budget estimates by N733 billion which amounts to 16 percent decrease whereas 17 states increased their estimates for 2020 by N855 billion which translates to 19.9 percent increase.

According to the data, the 36 states and FCT cumulative budgets for 2020 have remained largely the same, with the 36 states and the FCT budgeting a total of N9.331 trillion for 2020, slightly short of the total of N9.330 trillion budgeted in 2019.

The 2020 budgets’ total however does not capture any figure for Bayelsa State following the recently concluded governorship election and a handover slated for February 2020.

The Commissioner for Information and Orientation in the state, Daniel Iworiso-Markson, explained that the 2019 budget would run till the end of Dickson’s tenure – February 14, 2020.

The 20 states that reduced their estimates in line with the prevailing economic realities are: Abia (N141-N136bn), Adamawa(N224-N183bn), Akwa Ibom (N673-598bn), Anambra (N157-N137bn), Bauchi (N199-N167bn), Benue (N200-189bn), Borno (N145-N144bn), Delta (N390-N389bn), Edo (N184-N179bn), Imo (N251-N197bn), Ekiti (N130-N125bn), Niger (N195-N148bn), Jigawa (N160-N153bn), Oyo (N285-N213bn), Ondo (N194-N138bn), Kebbi (N151-N138bn), FCT (N243-N232bn), Kano (N220-197), Nasarawa (N191-100bn) and Ebonyi (N188-N178bn).

The 15 states that increased their estimates are: Cross Rivers (N1trn- N1.1trn), Enugu (N109-N170bn), Kogi (N147-N176bn), Kwara (N158-N162), Lagos (N874Bn-N1.1trn), Gombe (N122-N131bn), Plateau (N154-N172bn), Rivers (N480-N530bn), Sokoto (N170-202), Taraba (N146-N213bn), Yobe (N92-N108bn), Zamfara (N135-N182bn), Kaduna (N157-N259bn), Katsina (N202-N249bn), Ogun (N400-N449bn) and Osun (N154-N199bn).

The Daily Trust findings also revealled that barely 48 hours to the expiration of the December 31, 2019 deadline issued by the NLC to states to complete all negotiations regarding how much they will pay their workers, only Lagos, Kaduna and Kebbi have come presented their minimum wage offers.

While about six state governments are currently negotiating with their respective state chapters of the NLC, over 20 others have yet to begin negotiations with the labour union.

The labour has also said of the three states that released their minimum wage offers, only that of Lagos State was accepted by the union.

It rejected the minimum wage offered by Kaduna and Kebbi governments because they were inadequate and done without input from the state chapters of the labour union.

In terms of fiscal discipline, the analysis also revealled that all states have submitted their 2020 budget estimates to the state assemblies which compared better to same time in 2018 when only 22 states submitted their estimates to their state assembly.

An analysis of same time in 2018 had only Edo, Delta, Kaduna and Niger as the states that had passed their budgets and were ready for the turn of the new year.

For 2019, the analysis also showed that only eight states have so far signed their budgets into law. They are; Kaduna, Bauchi, Edo, Kogi, Kebbi, Gombe and Osun and Sokoto.

Twenty-eight states and the FCT have their budget at various stages of consideration at the state assemblies and look very unlikely to be signed before the 31st of December, which is barely 24 hours away.

Another interesting revelation in the budget proposals is the paradigm shift from a budget that is dominated by recurrent expenditure to one with a higher capital expenditure allocation.

Data revealed also that out of the N9.3 trillion total budget, the 36 states and the FCT budgeted a cumulative N5.6 trillion for capital expenditure which represents 60.2 per cent.

The states and the FCT budgeted a total of N3.5 trillion for recurrent expenditure representing 37.6 per cent. The remaining 2.2 per cent was for statutory transfers.

The governors, under the aegis of the Governors’ Forum, have ruled out any imposition of the federal template on the states.

The Chairman, Nigerian Governors Forum (NGF), Governor Kayode Fayemi of Ekiti State, was quoted to have said the agreement between the federal government and organised labour on consequential adjustments on the new minimum wage was not binding on state governments.

Mr Fayemi said the agreement and directive of the federal government applied only to federal workers.

The NLC had in a communiqué issued at the end of its meeting with the state council chairmen on December 12 said it would not be able to guarantee industrial peace and harmony in states that failed to conclude negotiations and began payment of the new minimum wage by December 31, 2019.

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20 States Cut 2020 Budgets By N733bn Despite Minimum Wage Agreement