Prof. Pat Utomi, a distinguished political economist, suggests that the minimum wage negotiations present a golden opportunity for the government and labour unions to align Nigeria’s economic trajectory with the principles of responsible spending and production-driven growth.
Speaking to the News Agency of Nigeria (NAN) in Lagos, Prof. Pat Utomi, a prominent economist and founder of the Centre for Values in Leadership (CVL), offered his expert advice on the ongoing minimum wage talks, leveraging his wealth of experience in politics and leadership.
Prof. Utomi weighed in on the heated stalemate between labour unions and the Federal Government over the new minimum wage, which culminated in a nationwide strike called by workers on Monday.
Utomi said: “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.
“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.”.
The economist stressed the importance of establishing a rigorous accountability mechanism, complete with tangible benchmarks and consequences, to ensure both labour and government adhere to their commitments.
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The economist advocated for the government to launch ambitious projects that spearhead a transition to production, echoing the vision of the Operation Feed the Nation (OFN) program in the 1970s, which sought to revitalize Nigeria’s agricultural sector.
He said that that future adjustments of minimum wage weighed heavily on productivity improvements
“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,” he added.
A crippling nationwide strike was launched by labour unions on Monday, protesting the minimum wage, and its impact was felt universally, sparing no sector of the economy.
The strike’s momentum was halted Tuesday when labour leaders, buoyed by the government’s willingness to revisit the minimum wage, agreed to a temporary suspension, buying time for both sides to hammer out a deal.
Labour rebuffed a series of proposals from the government and private sector, dismissing offers of N48,000, N54,000, and N57,000 as insufficient, refusing to budge on their demand for a higher minimum wage.
After initially pushing for a minimum wage of N615,000, labour leaders dialled back their demands, first to N497,000 and then to N494,000, in a nod to the economic headwinds facing the nation.