Background

Following growing agitations by labour unions and costly industrial strikes, the Government set up Wages, Salaries and Emoluments Relativity Panel in June 2004 to address the problem of growing disparity in salaries and wages payable within the public service, as well as between the public and private sectors. The panel recommended that workers’ pay should be indexed to inflation and reviewed every two years, and recommended a comprehensive evaluation of jobs in the public service. In November 2005 a Presidential Committee on the Consolidation of Emoluments in the Public further recommended that public sector wage should be increased by 25% in 2007 and a further 10% annually (plus cost-of-living adjustment) for the next 10 years.

Past Reform and Achievements

Salaries were consolidated in 2007. A pay rise of 15% was implemented in 2007. Two years later, in 2009, a tripartite presidential committee reviewed the national minimum wage. The minimum wage was then increased to ₦18, 000 in 2011, through the New National Minimum Wage Act. Estacodes and duty tour allowances were also increased. Four new allowances, namely, Job-Specific Allowance (JSA) (recurrent); Risk-Related Allowance (RRA) (recurrent); Relocation Allowance (RA) (one-off) and Scarce-Skills Allowance (SSA) (one-off/recurrent), were also introduced. It was also stipulated that the increases in pay should be extended only to MDAs that had carried out reforms in eliminating overlaps and duplications in job roles, improvement in the quality and reduction of the quantity of the skills in the public service, improvement in revenue generation from non-oil sector, company income tax, VAT, etc., and automation and centralisation of public sector payroll.

Challenges and Next Steps

The increase to the payroll component of the federal government budget that the pay reforms had engendered makes policies that will make the MDAs more commercially-oriented, to generate revenues, essential. The gap between the salaries received by civil servants and political office holders, which is brewing agitation in the labour unions, need to be bridged by the reduction of the amounts received by the latter. The perception that the pay reforms are in favour of some parastatals over others need to be addressed by making the amounts received by all MDAs more equal. A comprehensive pay policy should be enacted that would clearly identify for better transparency which allowances are built into salaries, which ones are paid annually, and which ones are paid every few years.