Wage Award: FG Struggles to Fulfill Wage Promise as Cash Shortage Emerges

Hopes of Nigerian federal workers for a substantial wage increase have been dampened as the government faces a severe cash shortage. The promised additional N35,000 wage for six months, along with a 40% special salary increase, now appears uncertain.

The initiative was initially unveiled by President Bola Tinubu on October 2, 2023, through a memorandum of understanding with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). It was introduced as a measure to mitigate the impacts of the subsidy removal on premium motor spirit (petrol) that took place in May 2023.

Although this announcement was welcomed by workers, concerns were raised by the NLC regarding the awards’ viability. As federal workers eagerly awaited the increased payments, it has come to light that the government may lack the funds required to fulfill its commitment to all federal employees.

Government agencies have been informed by the authorities that they should seek funds internally to pay their workers, rather than relying on funding from the federation account. While the government has paid workers categorized as “treasury-funded staff,” departments and agencies funded from consolidated revenue funds will not receive direct payments from the federal government.

This directive has left many of these agencies in a state of frustration, as they now have to source funds internally to meet their obligations to their employees. The situation is creating tension between the affected agencies and their workers, similar to the discontent seen in the ministries.

The National Incomes and Wages Commission issued a memo on October 19, 2023, outlining which categories of workers should be paid by the government and which should fend for themselves. The memo instructed non-treasury funded Federal Government agencies to utilize their internally generated revenue (IGR) or statutory allocations to fulfill the wage award and salary increase commitments.

Most of these agencies are non-revenue generating entities, and this new mandate has raised concerns among their workers. Some have questioned the decision and expressed doubts about the agencies’ capacity to secure the necessary funds to meet their employees’ demands.

The situation has escalated to the point where many workers’ unions are threatening to disrupt the operations of these agencies if their payments are not processed promptly, mirroring the discontent witnessed among their counterparts in core federal ministries.