Renowned political economist, Professor Pat Utomi, has urged the Federal Government and Organised Labour to use the ongoing minimum wage negotiations as an opportunity to steer Nigeria towards greater efficiency and production.
Utomi, the Founder of the Centre for Values in Leadership and the 2007 Presidential Candidate of the African Democratic Congress, offered this advice during an interview with the News Agency of Nigeria on Friday in Lagos.
His comments came in response to the ongoing deadlock between organised labour and the Federal Government regarding the new minimum wage for workers, which led to a nationwide strike declared by labour unions on Monday.
Utomi stated, “Labour must insist on a dramatic slash in the cost of government and investment of the savings made in production programmes and infrastructure. This is to facilitate and sustain the value chain of the output based on our latent comparative advantage from strong factor endowments.”
He further advised, “On its part, the government should establish what it is paying for. Is it paying as welfare for people who just show up? Output targets need to be established and hard consequences for abuse of positions like corruption and begging on the job from customers.”
Utomi emphasized the importance of setting benchmarks for civil society to monitor both parties, with clear consequences outlined. He also suggested that the government should introduce bold initiatives aimed at transitioning to a production-focused economy, similar to the Operation Feed the Nation program in the mid-1970s.
He stressed that future adjustments to the minimum wage should be closely linked to productivity improvements, stating, “Once a proper framework is established now the template to plug in productivity gains should be activated. It should not be a matter of sentiment or mood of the leaders on both sides.”
NAN recalls that the nationwide indefinite strike declared by organised labour on Monday, over the new minimum wage, affected all sectors of the economy. Following the Federal Government’s commitment to increasing its proposed minimum wage of N60,000 during a meeting with labour leaders, organised labour announced a suspension of the industrial action for a week to allow for further negotiations.
Initially, the government and the Organised Private Sector had proposed wages of N48,000, then N54,000, and N57,000, all of which were rejected by labour. Organised labour had proposed a new minimum wage of N615,000, but later revised it to N497,000 and then to N494,000, to reflect current economic realities.
