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Ganduje stops payment of N30,000 minimum wage, cites recession

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ABDULLAHI Umar Ganduje, Kano State governor, says his administration can no longer afford the payment of N30,000 minimum wage to the state’s civil servants owing to the country’s recession occasioned by the COVID-19 pandemic.

Salihu Tanko-Yakasai,  special adviser to the governor on media, who confirmed this to newsmen on Wednesday, said the state was unable to continue paying N30,000 because what it was currently getting had reduced.

“Yes, the state government has stopped the payment of N30,000 minimum wage to its workers with immediate effect,” he said.

“The state government has reverted to the initial minimum wage due to the recession.

“What we are getting now as a government has reduced, and we can’t afford to pay the N30,000 minimum wage.”

President Muhammadu Buhari had in 2019 signed the N30,000 minimum wage bill into law following its passage by the National Assembly.

The ICIR understands that about seven states out of the nation’s thirty-six states, which include Kwara, Ekiti, Imo, Gombe, Kogi, Zamfara and Ebonyi, are yet to implement the wage law.

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In November 2020, The ICIR  had also reported how Nigeria slipped into its second recession under the Buhari-led administration in five years.

According to data from the National Bureau of Statistics (NBS), Nigeria’s economic growth contracted by -3.62 percent in the third quarter of 2020.

It means the second consecutive quarterly Gross Domestic Product (GDP) decline since the recession of 2016. The cumulative GDP for the first nine months of 2020, therefore, stood at -2.48 percent.

The last time Nigeria recorded such cumulative GDP was in 1987, when GDP declined by 10.8 percent.

The 2020 economic recession was predicted across the world as a fallout of the ongoing COVID-19 pandemic, which has affected all of the strongest nations of the world.

Reacting, the Socio-Economic Rights and Accountability Project (SERAP), in an open letter to the president, demanded a cut in the cost of governance.

SERAP charged the government to implement a bold transparency and accountability policy as a way of responding to the economic recession.

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“This economic crisis provides an opportunity to prioritise access of poor and vulnerable Nigerians to basic socio-economic rights, and to genuinely re-commit to the fight against corruption. The country cannot afford to get back to business as usual,” the letter read in part.

Atiku Abubakar, a former vice president of Nigeria and candidate of the People’s Democratic Party (PDP) while commenting on the economic recession, said the proposed 2021 budget was no longer sustainable.

Atiku added that Nigeria should not continue to spend ‘lavishly’ because the country was financially broke already.

“Firstly, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable. Nigeria neither has the resources, nor the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation to being a broken nation,” Atiku said this, among other recommendations.

Meanwhile, the federal government announced in November, 2020, that it was proposing the exemption of minimum wage earners from paying the personal income tax as a way of reducing the impact of the economic recession on Nigerians.

This was disclosed in a statement by the Nigerian Presidency on social media.

“In order to reduce the impact of inflation on Nigerians, the Buhari administration, is, through the 2020 Finance Bill, proposing the exemption of minimum wage earners from Personal Income Tax,” it said.

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The Nigerian economy relies on crude oil for 75 percent of its revenue and 90 percent of foreign exchange. However, oil prices have slumped by over 40 percent in the last six years, resulting in revenue shortfall and foreign exchange decline. Covid-19 has further shrunk the country’s revenue, increasing the economy’s risk status.

 

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