The Technical Committee on the Implementation of a new Minimum Wage inaugurated last Wednesday by President Muhammadu Buhari has been asked to look for additional sources of revenue to pay the minimum wage and the consequential salary adjustment that will follow.
The Minister of Budget and National Planning, Senator Udoma Udo Udoma, during an interactive session with the media on Friday, explained that the committee would, among other things, identify additional sources of revenue to ensure that the government could meet the increased costs that would arise from the implementation of a new minimum wage without affecting government’s ability to meet the other obligations particularly with respect to the ambitious infrastructure development plans of the current administration.
According to Udoma, whenever a new minimum wage bill is enacted, there are demands for some wage increases even from those already earning more than the new minimum wage.
He said, “All these salary increases will impose additional costs on the government. Therefore, the committee is expected to make suggestions as to how the government can raise additional revenues to ensure that the government can still meet its expenditure on other services such as education, health, infrastructure and other important functions of the government, after paying the increased salaries.”
A statement signed on Sunday by the Special Adviser (Media) to the Minister, Akpandem James, added, “The committee is expected to, among other things, look at how to get additional revenues so that as our wage bill goes up, we are able to increase our revenues to ensure that our spending on capital projects, basic infrastructure, health, education and others is not reduced.
In short, the committee is to advise on ways to ensure that notwithstanding the increase in payroll costs, there continues to be adequate funding for other government activities. This is not just for the 2019 fiscal year, but going forward, thereafter.”
Because of government’s commitment to the minimum wage and increased salaries, Udoma had said that the amount provided for recurrent (non-debt) spending would rise from N3.53tn in 2018 to N4.72tn in 2019.
So, there is a substantial increase in the recurrent expenditure, which according to the minister, reflects an increase in salaries and pensions including provisions for the implementation of a new minimum wage.
“This is the reason why the President has set up a technical committee to look at additional revenue sources so that we can pay the minimum wage and the consequential salary adjustment,” he reiterated.
On the issue of the budget deficit, Udoma said the government was proposing to bring it down slightly from the N1.95tn projected for 2018 to N1.895tn in 2019. This, he said, was 1.3 per cent of Gross Domestic Product and well within the three per cent limit set by the Fiscal Responsibility Act.
Frontpage August 22, 2019