The current COVID-19 pandemic
has affected the financial strength of some state governments and enterprises in the country and elsewhere in the world, resulting in salary cuts or outright non-payment of emoluments, and in some cases in the private sector, planned staff lay-offs.
Some civil servants who spoke under anonymity said reverting to the old minimum wage had further increased their suffering, having started new life under the new salary structure.
Salisu Musa works as a watchman in a secondary school under the Gombe State Ministry of Education. He used to collect N18, 000 as his monthly salary, and with the implementation of the N30, 000 new minimum wage, his salary significantly increased, making it easier for him to cater for his family of five.
However, after collecting one month’s salary, the state government suspended the payment of the new minimum wage in March, citing dwindling revenue as a result of the COVID19 pandemic.
It was gathered that the decision of the government abruptly changed not only Musa’s life and that of his family, but also affected all civil servants in the state, forcing them to revert to their old salaries, just a month after adjusting to new life with the new minimum wage.
Some civil servants who spoke under anonymity said reverting to the old minimum wage had further increased their suffering, having started new life under the new salary structure.
A civil servant said he had already collected groceries on credit with the intention to pay for it after receiving his salary, only to be told that the new minimum wage was suspended indefinitely.
“Unfortunately, the announcement came out just a day to our March salaries, as such, we had to plead with our creditors to bear with us because with the cancellation we cannot pay them while also running our families.
“It is not easy, so I just paid the debt and at the same time collected other foodstuff and items on credit, pending when the government resumes payment of the new salaries,” he said.
The Deputy Governor, Dr Manassah Daniel Jatau who announced the reversion to the old minimum wage, said the decision was informed by the effect of the COVID-19 pandemic on the state’s finances.
He said the decision to suspend the new minimum wage with effect from March salaries was taken after consultations with the standing committee on minimum wage and relevant stakeholders.
“The minimum wage increment and its consequential adjustments adopted by the state have been suspended until when economy of the state improves. The Ministry of Finance will also review the 2020 budget to reflect the reduction in the price of oil in the international market and subsequent adoption of $30 per barrel benchmark by the federal government,” he said.
The deputy governor, who is the chairman of the implementation committee, said the government had embarked on austerity measures to reduce wastage and create savings for execution of necessary projects. Kogi pays 80 percent The Kogi State government also slashed the salaries of workers in its employment to 80 percent for the month of May, while that of the local government staffers was pegged at 35 percent.
The government had initially proposed 60 percent salary cut in response to the global realities occasioned by the outbreak of COVID-19 but the organized labour insisted on 100 percent salaries for May.
However, after series of meetings between the two sides, a middle ground was reached, pegging the salary at 80 percent.
The Commissioner for Finance, Budget and Economic Planning, Asiwaju Idris Asiru, said the state government had continued to experience shortfalls as the prices of crude oil sink deeper.
Daily Trust learnt that the dwindling allocation, poor internally generated revenue and rising indebtedness were putting pressure on the government’s purse.
Officials said the indebtedness has also been taking a toll on salary obligations to civil servants with banks swallowing the March 2020 statutory allocation paid in April.
It was learnt that the situation was compounded by the new Central Bank of Nigeria (CBN) guideline which foreclosed the granting of huge overdrafts to government as was the case in the past.
Our correspondent reports that the situation also led to a cut in workers’ April salaries with the state’s civil servants getting 80 percent, while those of the local government went home with 35 percent of their salaries.
The organised labour led by Comrade Onu Edoka said the gesture was a temporary measure in view of the prevailing global economic challenges, adding that labour would resist any attempt at pay cuts in the future.
The reduction in salaries has been eliciting reactions from civil servants in the state who felt shortchanged by the development.
Malama Ramatu Oyiza Salami who works in one of the ministries in the state secretariat expressed shock over the matter, saying they expected some measure of palliative from the government because of the hardship brought about by the COVID-19 pandemic, adding that the salary reduction had further compounded the situation for them.
She said having suffered immensely from irregular payment of salaries and entitlements in the past, the state government should have redeemed their condition rather than compounding it.
“What debt are they talking about? The federal government has waived the debt state governments owe it because of this coronavirus issue, so nobody should be telling us stories about any debt.
“What makes the situation more annoying is that the government has not even started implementing the new salary increment yet they are one of the first to cut salaries over a disease that they said has not entered the state. This is very sad and unfortunate,” she said.
Kaduna workers oppose 25% cut
In Kaduna State, while health workers have threatened to go on strike over the unilateral deduction of their salaries by the state government in April, 71 retired senior civil servants in the state have taken Governor Nasir El-Rufai and the state’s Attorney General to the National Industrial Court, challenging the deduction of their pension for use to fight the COVID- 19 pandemic in the state.
The governor had sometime in April announced 25 percent deduction from all workers in the employment of the state government to fund COVID-19 prevention in the state.
This did not go down well with many workers including the Nigeria Labour Congress (NLC) and the Joint Unions of Tertiary Institutions of Kaduna State (JUTIKA).
Daily Trust reports that the retired senior civil servants are challenging the deduction of N500, 000 from their pensions at the National Industrial Court (NIC).
According to their counsel, Barrister Sam Atung Esq, the deduction from his clients’ pensions started in March, 2020 without their prior notice.
“In view of that, we have now instituted a case at the National Industrial Court on the ground of pension rights of the plaintiffs as enshrined in Section 210 of the 1999 constitution as amended, challenging the recent decision of the Kaduna State government on the deduction of monthly pensions of the plaintiffs in the matter.
“We went to court for it to determine whether by a construction of clear and unambiguous provision amongst others the entire Section 210 of the Kaduna State Pension Reform Law, 2016, the plaintiffs’ right to pension being retired officers in the public service of Kaduna State is not guaranteed and protected.
“The plaintiffs are seeking a declaration that the defendant’s purported reduction of their monthly pensions to their disadvantage is unconstitutional, utra vires and therefore null and void ab-initio,” he said.
Niger LG workers panic over 20%
Though civil servants in Niger State have continued to get their full salaries, many of them exercised fears in March that COVID-19 may affect their salaries. Their fears were heightened when local government workers in the state complained over a 20 percent deduction from their March salaries. The workers who said the deduction was made to cushion the effect of COVID-19, but lamented that the act amounted to insensitivity on the part of the council chairmen.
Some of them claimed that as much N20,000 was deducted from their salaries.
It was however learnt that the decision by the councils to forfeit 20 percent of their March allocation which was reflected in the salaries of the workers was reached at a tripartite meeting between the 25 local government council chairmen, officials of the National Union of Local Government Employees, those of the Nigeria Union of Teachers and the Medical and Allied Workers Union.
The local government chairmen were said to have agreed that the workers be paid 80 percent
of their salaries for march with the 20 percent set aside to provide some palliatives to the vulnerable to cushion the effect of the stayat-home directive in the rural communities, including providing other necessary things to tackle possible spread of COVID-19.
This decision according to the state chairman of the Association of Local Government of Nigeria (ALGON) who is also the chairman of Chanchaga Local Government, Mallam Ibrahim Abubakar Bosso, was informed by the shortfall in the total amount accruable to the councils from the March federal allocation.
Daily Trust however learnt that the deduction was only from the March salaries and was later refunded to some of them while some said they haven’t got the refund till date.
Kano political office holders take cuts
In Kano, the state government announced that workers’ salaries would not be slashed, but the government recently announced that political office holders would hence forth be receiving half salaries due to a shortfall in the federation account allocation and collapse in the state’s Internally Generated Revenue (IGR) as a result of the economic challenges posed by the COVID-19 pandemic.
The state government said all political office holders in the state are to receive half salaries with immediate effect from May 2020.
The political office holders affected include the governor and his deputy, all commissioners, special advisers, senior special assistants, and special assistants among others. At the local government level those affected include local government chairmen, deputy chairmen, councilors, supervisory councilors, advisers and secretaries.
However, contrary to the government announcement, minutes after workers in the state began receiving their May salaries, they discovered a slash.
According to worker with the teaching service board, Malam Shan’unu Baba, his may salary came with a slash of N12, 300. He said this would affect his expenditure during the Sallah festivity. Another civil servant, Abubakar Bello, told Daily Trust that he and all his colleagues had a slash in their May salaries and no had given them any explanation, adding that the cut would surely affect their Sallah.
An investigation carried by Daily Trust in Kano revealed that the unexpected salary cut has generated a lot of reactions, but efforts by our correspondent to reach the state’s Head of Service spokesman failed as calls put to her lines were not answered.
It was gathered that some industries and private sector firms such as private hospitals have slashed workers’ salaries. According to Mamman Sani, a bakery worker, in normal circumstances, his salary which he receives every fortnight lasts for eight days only, and now that it has been reduced by 20%, he is finding it very difficult to survive.
“This COVID-19 has reduced us to mere walking corpses, as a bakery worker who gets paid every two weeks my salary was slashed by 20%, and this is something that only takes me eight days. We and our families are walking corpses as we are just surviving and not living,” he said.
83% of businesses planning job cuts – LCCI
A recent study by the Lagos Chamber of Commerce and Industry (LCCI) revealed that 83 percent of businesses in Nigeria are planning to cut down salaries, downsize workforce or implement a combination of both measures to remain afloat.
Penultimate week, the Group Managing Director of Access Bank, Herbert Wigwe, held an employee town hall meeting with some staff of the bank via Microsoft’s Teams (video) and informed them of some strategic moves that the financial institution would take this month to ensure that it withstands the ravaging effects of the present crisis.
According to him, the decision would affect the bank’s 5,870 permanent staff starting with him, as his salary would be cut by 40%.
Some private firms have lamented their inability to meet up their obligations to their staff. The principal partner of Taiwo O.S Fadahunsi & Co Legal Practitioners, Mr. Taiwo Fadahunsi, had in an interview stressed the need for governments through states’ inland revenue services to assist private firms financially to enable them meet up their obligation of paying staff salaries.
“We have tried our best by paying April salaries but for May, we may pay half or nothing because all activities are grounded,” he said.
Private school owners are also lamenting their inability to pay staff salaries since the closure of schools due to COVID-19. Many private school teachers are yet to get their April salaries.
The National Association of Proprietors of Private Schools (NAPPS), an umbrella body for private school owners in Nigeria, has called for provision of educational grants by the federal government to cushion the effect of COVID-19 pandemic and to bail out the sub-sector from imminent collapse.
The president of the association, Chief Yomi Otubela, emphasised that the financial palliatives from the federal government would enable private schools meet monthly obligations to their staff and remain afloat.
According to him, the population of private schools in the country stands at 83,524 with 34,614,169 learners and 1,000,143 teaching and non-teaching staff. The over one million teaching and non-teaching staff, he said, work assiduously towards transforming the lives of the Nigerian child, pay taxes to the government and undertake other civic responsibilities.
The request for palliatives, however, he said has become imperative given the strategic position of the sector which has not only been providing succour in meeting the educational needs of a significant number of Nigerian learners but also employers of labour to a vast number of the Nigerian populace who work as teaching and non-teaching staff.
“This is in addition to a lot of jobs indirectly provided through services rendered by school contractors and suppliers among others,” he said.
Sim Shagaya, the Chief Executive Officer of uLesson, said: “Many CEOs see the current situation stretching into early 2021, even after the lockdown ends.
“This period calls for leaders to be incredibly decisive and to basically think about what is the priority, literally, what the business will need to survive and sell”, he added.
The media sector is not left out. According to some journalists and industry watchers, virtually every media establishment has undertaken between 30 and 60 percent salary cut from April 2020.
The industry is currently grappling with several problems, ranging from the COVID-19 pandemic, depleted funds due to the lockdown across major cities, and loss of revenue due to lower advertisements.
Similarly, fears of impending staff downsizing in the aviation industry have now come to fruition following the announcement by Air Peace to cut down operations by 60 per cent when flights finally resume next month after more than two months of shutdown occasioned by the COVID-19 pandemic.
Many airlines had earlier taken a drastic decision to cut staff salaries while others did not pay at all since the shutdown started. It would be recalled that immediately after the airspace was shut and all domestic airlines stopped operations, Max Air immediately announced in an internal memo to staff that it would not be able to continue with salary payment.
Apart from airlines, the aviation agencies, especially the Federal Airports Authority of Nigeria (FAAN) that runs its operations entirely on internally generated revenue (IGR), is facing a tough time as the revenue stream has virtually dried up due to near inactivity at the airports.
Apart from a few emergency and evacuation flights, there has been over 90 per cent reduction in flights which automatically translates to 90 per cent reduction in revenue.
FAAN had announced it would not be able to pay full salaries for the month of May, a decision that pitched the management against the workers as the unions rejected the proposal. After much pressure, the decision was rescinded.
In an internal circular to the workers by the unions comprising the National Union of Air Transport Employees (NUATE) and Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) dated May 21, 2020, it was revealed that the U-turn was made by the management of FAAN after extensive negotiations.
But in the airline sub-sector, the future is particularly bleak as many airlines have announced plans not only to cut down operations but to downsize staff.
The Chairman and Chief Executive Officer of Air Peace, Nigeria’s biggest carrier, Mr. Allen Onyema, hinted that the company would downsize operations.
Onyema noted that when flight operations resume, there would be low passenger turnout hence the need to cut down operations at the beginning.
He disclosed that a few of the carrier’s aircraft would be deployed at resumption while flights would be reduced from 100 daily to about 40.
Following the development, he said a few staff would be required for the commencement of operations.
The Chief Executive Officer of Aero Contractors, Capt. Ado Sanusi, also spoke along the same line but both hinted that the staff would be brought back as soon as the industry returns to full operations and profitability.
The Director-General of Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu, had also hinted that many airlines may not survive the post COVID-19 era.
However, experts and stakeholders in the industry suggest that urgent bailouts from the federal government would save the industry from job losses.
A recent study by the Lagos Chamber of Commerce and Industry (LCCI) revealed that 83 percent of businesses in Nigeria are planning to cut down salaries, downsize workforce or implement a combination of both measures to remain afloat.