The struggle for a minimum wage in Nigeria

Protracted negotiations about a minimum wage for workers in Nigeria put the country's unions where they belong: in front of the struggle for poor people.

Oil workers in Port Hartcourt, Nigeria. Image credit Cristiano Zingale via Flickr.

On Tuesday November 6th, the Nigerian Labour Congress (NLC) called off a general strike after agreeing with the government to increase the national minimum salary by 67% to 30,000 Naira (US$ 83). In typical fashion, Bloomberg, the American business news service, couldn’t help pointing out that “Nigerian labor is flexing its muscle before an election, winning a large increase in the minimum wage despite investor concerns about the oil-exporting nation’s deteriorating budget balance.” The wage increase has been described by the usual dial-a-quote anti-labor experts as a populist move that will distort the state economy and further fuel inflation. Another example from Reuters: “Economists say the new minimum wage risks stoking inflation, which is currently above the central bank’s single digit target thereby creating a new headache for the bank as it defends the currency hit by lower oil prices.”

Contrary to the wisdom of these “experts,” the process is better seen as a key fora for democracy at work, the minimum wage being neither fair nor enough for a decent living. And what should be clear is that Nigerian workers on minimum salary are not to be blamed for an overspending by public officials.

The new proposed minimum wage is a compromise agreement between workers, employers and the government. Such tripartite negotiations are a sign of democracy at work, founded in the ILO conventions of rights to collective bargaining (ILO core convention #98) and on minimum wage machinery (ILO #26), both to which Nigeria’s government is a signatory. Minimum salaries should be adjusted on a regular basis to keep up with inflation, and according to Nigerian law, it should be negotiated at least every five years. The Nigerian negotiations were way overdue given that the last Nigerian minimum wage agreement was in 2011.

In 2011, the minimum wage of 18,000 Naira was equivalent to about US$110, today it is worth less than US$50. This is below the poverty line, and the NLC claimed it was the lowest minimum wage on the continent. It is a far cry from what Lagosians—the inhabitants of Nigeria’s crowded commercial capital—estimate they needed to make ends meet. Stuck in economic crisis since 2014, the country’s external debts have doubled in three years (only a decade after the “watershed” debt relief in 2005), the middle class with stable income is shrinking and the numbers of working poor are expanding. At the same time, the costs of living is fast increasing with inflation, illustrated by the fact that foodstuff like cereals, cooking oil and even spices, are now sold in daily portions.

Though a 67% increased minimum wage sounds formidable, the new minimum wage of 30,000 Naira (US$83) is in real terms it lower than the 2011 minimum wage at the time of agreement (US$110).  Workers were represented at the tripartite negotiations through NLC, the Trade union congress (TUC) and United Labour Congress (ULC). The (original demand of the NLC and TUC was 66,500 Naira (US$181), while the ULC (which is not recognized by the federal government) demanded 96,000 Naira (US$264). By comparison, the 1981 minimum wage of 125 Naira was worth US$200.

With labor rights under pressure, and an ever expanding share of labor being precarious, even some of the so-called “privileged”oil workers “work 12-hours-a-day, six-days-a-week for monthly salaries ranging from US $137 to US $257.” As one oil worker in Port Harcourt, told a visiting delegation of American oil workers: “We work like an elephant and eat like an ant. Our salary at (contractor) Plantgeria is about 95,000 Naira (US$257). In Nigeria today, you can’t do anything on that. You can’t pay your children’s school fees. You can’t eat well. You can’t do anything better for yourself.” In my own work in the Niger Delta, I have met contract workers in oil pipeline security earning wages as low as 20,000 Naira (who had also not been paid for months).

When the ruling APC party called the tripartite forum—consisting of representatives of workers, employers and the state—for minimum wage negotiations at the of December 2017, it was long overdue. It also came after continuous calls from the unions. Nevertheless, the process has been stalling. The three negotiating union centers NLC, TUC and ULC have been frustrated by the government, and threatened strike on several occasions. The government has held back the conclusion, not only because “they cannot afford” an increase, but allegedly also to conclude the deal as close to the national elections in early 2019 as possible in order to gain popular support.

After the tripartite forum concluded on November 6th, the opposition presidential candidate, Atiku Abubakar (PDP) promised workers  a 33.000 Naira minimum salary in his private businesses and a living wage if elected. (Atiku’s claim to employ 100,000 workers has been hotly contested on social media.)

Although the Nigerian unions are under deep pressure, they have been able to mobilize and shut down the economy, as demonstrated in January 2012 during the Occupy Nigeria protests. The increase in minimum salary is popular, as it will improve the purchasing power of a large majority of Nigerians.

Formally, the minimum wage agreement is a recommendation to Parliament, which has to pass it into law. The parliamentarians that will vote are among the richest of the world. While using private salaries to support patronage networks is not necessarily illegal, using private or public funds to stay in political positions through vote buying is corrupt. Nigerian political corruption is well-known, vast and systemic, and politicians’ misuse of public funds for personal and political support tend to increase in the run-up to elections (as in now), and it is particularly strong at state levels.

Nigeria has 36 states. They are key public sector employers. Despite the fact that the Governors Forum, representing the governors of these states, had six representatives at the tripartite forum, they refuse to accept the new minimum wage and have threatened to sack workers because they cannot pay the bill.

In addition to many of them not implementing minimum wage rules, 33 out of 36 states are late in paying workers. The Chairman of the Nigerian Governors’ Forum, Abdulaziz Yari, told reporters: “the problem of state is the capacity to pay what is agreed. As we are talking today, we are struggling with N18,000. Some of the states are paying 35 per cent, some 50 per cent and still some states have salary arrears. So, it is not about only reviewing it but how we are going to get the resources to cater for it.”

Recently the NLC urged:

We propose that since a few political office holders are bent on enslaving Nigerian workers with peanuts mislabeled as salaries, we urge such elected public officials to subject their humongous salaries and allowances, reputed to be among the highest in the world, pro rata with the minimum wage they want to force down the throats of Nigerian workers.

Azubuike Azubuike, chairman of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), based in the oil capital Port Harcourt, goes further and suggests that if governors cannot pay, it is a sign of their failure to build a viable economy and their incompetence to govern, and they should resign.

The public explanations of this “culture” of not paying workers, endemic in the public sector but not uncommon in the private, “range from the non-existent to the hollow.” One explanation is simply that they do not need to pay. Workers turn up without pay as they are desperate to keep their jobs in a sea of unemployment. In addition, politicians’ dependence on the electorate—as in workers and users of public goods—is limited for their political legitimacy and electoral chances.

Instead, the Nigerian state and its politicians depend economically on oil rent, not from income taxes. Since the 1970s, about 70% of Nigerian state income comes from this sector. With oil rents, there are little incentives to build a productive economy. Only Lagos has an economic base relatively independent of oil rent. Elections are more about about elite compromises of power-sharing than about giving the political leaders a popular mandate.

To further complicate matters, non-payment of workers is “the other side of the coin to Nigeria’s notorious ‘ghost worker’ problem.” Ghost workers are people who are on the public payroll, but are not to be found in the public offices, either because they are dead, retired or have better things to do. They are found at both the federal and state level. Earlier this year, the Economic and Financial Crimes Commission (EFCC) claimed there were 62,000 ghost workers on the federal payroll. The NLC has fought such practices at the national and state levels.

According to former Minister of Finance, Ngozi Okonjo-Iweala, economic incompetence and corruption makes budgeting “hell.” Though some politicians may truly fight corruption, few politicians support the workers’ struggle, or labor rights.

Take for instance Presidential candidate, Oby Ezekwesili, former Federal Minister of Education (2006-2007), who is acclaimed internationally for her promotion of girls’ rights both in education and as part of the “Bring Back our Girls” campaign. While in Oslo during a talk on education and peace, I had the opportunity to have an informal conversation with her. I am interested in the role of trade unions, so I asked her if she had discussed her then educational reform plans with the Nigerian Union of Teachers (NUT). Her response was: “Imagine that, the teachers in Nigeria want to negotiate a collective agreement!” Trying to refer to the ILO convention of the right to bargain, and the fact that we were in a country where that is taken for granted even for police and army staff—and where unions are considered professional partners in issues of quality of education, she simply said “You and I will never agree.”

The private sector are as much to blame for corruption, and for breaking labor rights. And international economists are not alone in arguing against increased salaries. Former Nigerian President, Olusegun Obasanjo, is currently touring to promote his Making Africa Work – a Handbook. Promoted as a handbook for African leaders, focusing on how to attract investments for growth and job creation, it it is basically a neoliberal manifesto. Former President of Malawi, Joyce Banda is quoted in a blurb: “I wish I had this handbook when I was president of Malawi. It not only offers convincing arguments on what to do, but practical examples and steps on how to get things done.” I think workers in Malawi should be happy she did not have that book. The book explicitly advocates low wages as a comparative advantage for African states to attract foreign investments, and implicitly promotes fragmented and flexible labor organizations and collective bargaining. In other words: weakening the unions.

When Obasanjo and his co-author, the South African Greg Mills, launched the book in Norway, I asked them about how we could ensure that the assumed investments would over time improve the conditions of the African working poor, when minimum salaries in Ethiopia, Nigeria and South Africa are reported to be below the poverty line. Mills gave a long answer, focused on how difficult it was to attract investments and create jobs, but without any plan or idea on how to ensure decent work and working conditions for the working poor, short or long term. He did not even try a trickle down argument, but “reminded me” that the alternative to low wages is no wages, or lower income in the informal sector. An answer that is both arrogant and ignorant. According to him, African workers are to be grateful for jobs with wages that cannot support their basic housing and food needs.

Promoting job creation without decent wages and labor rights, is like a promoting democracy without freedom of speech and political parties. Furthermore, minimum wages actually apply to the informal sector. Counter to common assumptions, sociologist Jimi Adesina (1994) found that after the expansive growth of informal sector during the liberalization of the structural adjustments in the 1980s and 1990s, many informal sector workers earned more than formal sector workers. Though Adesina’s numbers are outdated (I have not been able to find updated and trustworthy numbers), there is no reason to believe this is not the case today.

Even in a country like Nigeria, without (historically) or with a limited democracy (presently), where politicians only partly rely on a popular mandate, no ruler can stay in power without a certain level of support. Nigerian unions have voiced popular concerns, and been able to mobilize beyond their members by linking workers’ issues to broader bread-and-butter issues and democracy struggles. Unions’ roles in promoting democracy in the 1980s and 1990s is well documented. Since 1999, the unions have cushioned labor law reforms; mediated between political institutions (strengthened the role of parliament against the executive) and between the state and citizens; resisted deregulations of the oil industry and protected the purchasing power of poor people and workers through minimum wages and resisting fuel subsidy removal. The unions have challenged the Nigerian political elites, primarily by exposing and fighting corruption, but also by promoting leftist politics.

Nigerian political leaders have tried to break the popular power of the Nigerian trade unions throughout the country’s history, and Nigeria continues to be one of the worst countries in the world for workers, with “no guarantee of labor rights.” In addition to the direct repression of the most brutal military dictators, President Obasanjo tried to break the unions through the law. In 1978, by military decree, he tried to control the unions from above by allowing only one labor center (the NLC) and one union per industry. This largely failed, though it made the unions vulnerable. The union members at the grassroots ensured union militancy and independence, even when the NLC leadership was in the government’s pockets (such as during the democracy struggles in the 1990s). In 2005, President Obasanjo tried to reverse and liberalize the labor law in a blatant attempt to curtail labor power though fragmentation.

The NLC was able to resist this. While Obasanjo wanted any two unions to be able to form a labor center, the National Assembly ensured that 12 unions that did not already belong to a center were needed to form a new center. The ULC, formed in 2015 as a splinter union by disgruntled leaders from the NLC congress, has not been registered because their members already belong to NLC and TUC. (The 2005 law also opened for the registration of TUC, organizing white collar workers that were not allowed to organize into trade unions until then). ULC have accused NLC of obstructing their freedom of association. It is true that it does not follow freedom of association standards, at the same time the law continues to ensure trade union unity (as since 1978). From not being on talking terms, the fact the ULC has been included in the tripartite fora alongside NLC, raises the hope for reunification of the Nigerian union movement.

The unions’ ability to organize and mobilize, and to put pressure on political and economic elites through strike actions and negotiations, has relied on unity but also on a strong militancy at the workplace and close alliances with civil society allies.

This workplace strength has been concentrated in key private sectors such as textile and oil. Following the 1978 labor law, and obligatory union membership and the automatic deduction of dues, public sector unions have largely neglected grassroots organization. (With some important exceptions). Deindustrialization (of textile) and outsourcing, casualization and export processing zones (as in the oil sector) structurally challenge the grassroots organization in the private sector. The withering of a well-organized and militant grassroots was also caused by a long time neglect of traditional organizing, in particular recruitment and training.

The Nigerian left (as discussed here) and therefore unions’ driving ideological basis lost momentum after 1990, contributing to unfocused union strategies. The recent attempt to revitalize the Nigerian left, should include a clear place for the unions. While the unions need comprehensive ideas to build their unity and strength from the grassroots by attracting the youth, the left will depend on the unions’ structures and mobilizing potential.

Alliance politics have contributed to the unions’ social, economic and political significance at the workplace and beyond. Civil society allies have supported the unions in minimum wage and pension struggles. In 2005, the formation of LASCO (Labour and Civil Society Coalition) formalized this alliance between “labor friendly” civil society organizations, TUC and NLC. Whereas during the repressive years of the 1980s and 1990s, few organizations had the strength and capacity to take leading public roles. With the opened spaces policy started in 1999, there is now increased contestation of popular representation. This was particularly clear during the controversies over the NLC’s role in the Occupy Nigeria movement. Unions lost control and were challenged by political actors as well other civil society actors in their claim to represent “voices of the poor.”

The unions’ popularity never translated to a sustained political power, although they have several times since the 1960s tried to establish or revitalize a Labour Party (LP). This can be explained by people acting according to short term interests (in having “their man in power”) against their long-term ideals (anti-corruption, redistribution). Unionists who entered politics have also not found the LP as an interesting party ticket, as there is little money in it. Former president of NLC (1999-2007), Adams Oshiomole, ran on an All Progressive Congress (APC) ticket as governor of Edo state (2008-2016). He is now National chairman of the APC. Although his electoral support was based on his background and popularity from his time in the unions, Oshiomole is not seen as a representative of labor in politics. Oshiomole led massive strikes against Obasanjo’s attempts to remove the fuel subsidies in the early 2000s, which lead to his arrest as well as the 2005 labor law reform. During Occupy Nigeria in 2012, Oshiomole wanted to do away with the fuel subsidy and lobbied the unions to call off the fuel subsidy strike.

The minimum salary negotiations have again put the Nigerian unions where they belong: at the forefront of the struggle for poor people. Nigerian unions and unionists are not free of corruption and political manipulation, and some are likened to a “mafia.” However, in the larger picture, the unions play a formalizing role, a challenge to corruption and an actor in and for democratic processes. Despite their own problems and limitations, without the collective power of the unions, there are few political forces that poor Nigerian workers can lean on. Signing agreements “is the simple issue, implementation has always been the bane of policies in Nigeria.” And the NLC, one of Africa’s biggest unions, says they still stand by to strike should implementation of the new wage drag.

Further Reading

How the Nigerian Left imploded

In the history of democratic transitions in Africa – whether from military, one-party, civilian or multi-party rule – Nigeria’s experience presents an interesting dimension. First, the military regime of General Ibrahim Babangida handpicked the parties …

#OccupyNigeria

Nigeria’s political leaders probably did not expect this kind of response from the populace –mass protests, a national strike starting today that shut down major cities–when they decided, on January 1, 2012, to scrap fuel …