Osun, 9 Others Will Struggle To Pay New Minimum Wage – Report

OSUN, Benue, and Oyo have been identified as some of the states that have the least ability to pay and finance a new minimum wage.

This was revealed in a report by a research firm, Analysts Data Services and Resources (ADSR).

According to the report, other states that may find a wage review challenging are Yobe, Kogi, Adamawa, Jigawa, Kebbi Plateau, Kano, Nasarawa, and Ekiti.

But, Lagos, Imo, and Zamfara ranked highest in computed ability to pay.

In its recent report titled “The Nigerian New Minimum Wage: Implications for State Governments’ Budget Performance”, the Ibadan-based research institute adopted four metrics to arrive at the rankings.

READ: EDITORIAL: Once Again On The Minimum Wage

In computing the states’ ability to finance a new minimum wage, ADSR examined the ratio of personnel expenditure to total expenditure, total revenue, internal revenue, and states’ total debt stock.

“This analysis shows that states with relatively high ability to pay are those currently having: low personnel expenses to total expenditure ratio; low personnel expenses to revenue ratio, especially, IGR; low debt profile, and relatively high elasticity of personnel costs contribution to future revenue and expenditure,” it stated.

OSUN DEFENDER recalls that Governor Ademola Adeleke had called for the review of the Federation Account Revenue sharing formula as well as the moving of solid minerals from exclusive to concurrent legislative list.

Adeleke who represents the South West at the National Tripartite Minimum Wage committee noted that a review of the revenue-sharing formula and amendment of the legislative list is necessary to boost the capacity of the states to pay the new minimum wage. 

He, however, posited that individual states would have to negotiate with their workers and agree to a realistic and sustainable minimum wage in line with the available resources.