BudgIT Report: Blanket Minimum Wage Not Feasible Amid Fiscal Imbalance

Nigerian civic organisation, BudgIT, has said a blanket minimum wage implementation was currently not feasible given the horizontal fiscal imbalance among the 36 states of the federation.

In its “Wage Bill of States” report which analysed the country’s current minimum wage controversy, particularly states revenue capacity, wage bill and fiscal imbalance, BudgIT stated that considering the wage bill of states and average monthly salary to a worker, each state would have to negotiate its own minimum wage based on its economic reality.

The organisation noted that though all the states earned N7.85 trillion in 2023, 15 per cent of the amount was earned by Lagos alone, while 51 per cent of the cumulative revenue went to the top eight states including Lagos, Delta, Rivers, Akwa Ibom, Bayelsa, Oyo, Ogun and Ondo.

It further based its conclusion on the fraction of states revenue spent on personnel cost for 2023, whereby Kano spent the most at 40.91 per cent, Imo 37.64 per cent and Adamawa 37.32 per cent.

States’ (excluding Taraba) 2023 personnel actual (salaries, allowances and social benefits including pensions and gratuity stood at N1.94 trillion to 1.16 million workers while monthly average personnel cost per state employee stood at N4.74 billion to same number of beneficiaries.

In addition, the report showed the fraction of state revenues spent on personnel cost in the review year.

States’ actual personnel cost as a percentage of actual revenue in 2023 further showed that Taraba expended 37.24 per cent; Ogun 35.58 per cent; Niger 35.34 per cent; Oyo 35.22 per cent; Kogi; 35.12 per cent; Sokoto 33.82 per cent; Osun 33.37 per cent; Cross River 33.31 per cent; Enugu 32.01 per cent; Yobe 30.80 per cent; Katsina 30.04 per cent and Nasarawa 29.96 per cent.

Others include Ondo 29.92 per cent; 29.21 per cent; Kaduna 29 per cent; Jigawa 28.06 per cent; Benue 25.35 per cent; Bauchi 25.34 per cent; Ekiti 25.13 per cent; Rivers 25.13 per cent; Plateau 24.79 per cent; Kwara 24.56 per cent; Zamfara 24.31 per cent; Kebbi 23.89 per cent; Gombe 23.64 per cent and Borno 22.06 per cent.

Others are Abia 20.04 per cent; Delta 17.74 per cent; Anambra 17.61 per cent; Lagos 16.58 per cent; Bayelsa 16.44 per cent; Ebony 16.38 per cent and Akwa Ibom 15.57 per cent.

The report further highlighted the horizontal fiscal imbalance among the states in 2023 as the actual revenue (excluding loans) – revenue as a percentage of cumulative revenue of Lagos stood at N1.18 trillion (15.09 per cent); Delta N722.96 billion (9.21 per cent); Rivers N526.20 billion (6.70 per cent); Akwa-Ibom N469.66 billion (5.98 per cent); Bayelsa N363.55 billion (4.63 per cent);

Oyo N266.01 billion (3.39 per cent); Ogun N247.90 billion (3.16 per cent); OndoN205.17 billion (2.61 per cent); Edo N195.67 billion (2.49 per cent) and Kano N193.94 billion (2.47 per cent).

Others are Kaduna N185.93 billion (2.37 per cent); Anambra N176.41 billion (2.25 per cent); Kwara N176.51 billion (2.25 per cent); Jigawa N174.94 billion (2.23 per cent); Bauchi N169.21 billion (2.16 per cent); Kogi N161.92 billion (2.06 per cent); Benue N159.27 billion (2.03 per cent) and Borno N141.04 billion (1.80 per cent); Katsina N136.61 billion (1.74 per cent); Plateau N133.53 billion (1.70 per cent); Gombe N131.10 billion (1.67 per cent); Osun N130.14 billion (1.66 per cent); EbonyiN128.87 billion (1.64 per cent); Nasarawa N127.93 billion (1.63 per cent); and Enugu N126.64 billion (1.61 per cent).

Other include Yobe N126.02 billion (1.61 per cent); Ekiti N122.11 billion (1.56 per cent); Sokoto N121.72 billion (1.55 per cent); Niger N117.54 billion (1.50 per cent); Imo N111.54 billion (1.42 per cent); Kebbi N110.08 billion (1.40 per cent); Cross Rriver N109.12 billion (1.39 per cent); Zamfara N108.63 billion (1.38 per cent); Adamawa N103.19 billion (1.31 per cent); Abia N99.51 billion (1.27 per cent) and Taraba N84.72 billion (1.08 per cent).

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