774 LGs can’t pay N62,000 minimum wage — ALGON boss

Concerned about the proposed N62,000 minimum wage, the Association of Local Government of Nigeria has insisted that, should it be approved, it may significantly increase the financial burden on councils.

On Wednesday, the federal government chastised organised labour for failing to take into account the wider economic consequences of its demands for an unjustifiably higher national minimum wage.

The admonition was delivered by Mohammed Idris, Minister of Information and National Orientation. Idris hinted that the N250,000 minimum wage demanded by labour could damage the economy, cause a mass layoff of workers, and endanger the welfare of Nigerians.

The labour unions, on the other hand, denied President Bola Tinubu's assertions that a deal had been reached on the new national minimum wage during his Democracy Day broadcast on Wednesday.

However, ALGON National President Aminu Muazu-Maifata stated in a Channels Television interview on Thursday that it would be challenging for LGA administrations to pay the N62,000 suggested minimum wage.

He claims that some of the nation's 774 LGAs are still having difficulty paying the N30,000 minimum wage that was established in 2019.

The president of ALGON declared, "No local government council anywhere in Nigeria can be able to pay N62,000 with the current allocation from FAAC."

"Right now, salaries and pensions account for 90% of our inflow from the Federation Account," he continued. It will be very difficult, if not impossible, for local government councils to pay the N62,000 minimum wage in the absence of an upward review of the percentage of allocation to them.

The federal government received more than 52% of the federation's total FAAC, while the 774 local government councils received slightly more than 18%.

Some councils are still operating on N18,000 because they could not even afford the N30,000. Ninety percent of FAAC's current funding goes towards pensions and salaries.

This indicates that local government councils will find it very difficult or impossible to pay N62,000 in the absence of an adjustment and an upward review of the percentage going to local councils.

The chairman of Lafia Local Government in Nasarawa State, Muazu-Maifata, stated that local governments would need to ask governors and the federal government for financial support if the proposed minimum wage law is approved.

"To augment whatever will be accrued to local government councils from the Federation Account, we will have to run to our principals, the governors, and the Federal Government," he declared.

He claims that in addition to paying salaries, councils have other responsibilities, and it is important to take these into account when setting a minimum wage that is both reasonable and sustainable.