Minimum Wage: Technical
Minimum Wage: Technical Committee to look for additional
revenues – Udoma
The Minister of Budget and National Planning, Senator Udoma Udo
Udoma, at the weekend explained that the Technical Committee on the
Implementation of a new Minimum Wage inaugurated last Wednesday by
President Muhammadu Buhari is to, amongst other things, identify
additional sources of revenue to ensure that government can meet
the increased costs that will arise from the implementation of a
new minimum wage without affecting government’s ability to meet the
other obligations of government, particularly with respect to the
ambitious infrastructure development plans of the Government.
Senator Udoma who was interacting with media editors in Lagos
explained that whenever a new minimum wage bill is enacted there
are demands for some wage increases even from those already earning
more than the new minimum wage. All these salary increases will
impose additional costs on Government.
Therefore the committee is expected to make suggestions as to
how government can raise additional revenues to ensure that
Government can still meet its expenditure on other services such as
education, health, infrastructure and other important functions of
Government, after paying the increased salaries.
“The committee is expected to, amongst other things, look at how
to get additional revenues so that as our wage bill goes up, we are
able to increase our revenues to ensure that our spending on
capital projects, our spending on basic infrastructure, our
spending on health, our spending on education and others is not
reduced. In short, the committee is to advise on ways to ensure
that notwithstanding the increase in payroll costs, there continues
to be adequate funding for other government activities. This is not
just for the 2019 fiscal year, but going forward, thereafter.”
On the issue of the budget deficit, the Minister said government
is proposing to bring it down slightly from the N1.95 trillion
projected for 2018 to N1.895 trillion in 2019. This, he said, is
1.3% of Gross Domestic Product (GDP), well within the 3% limit set
by the Fiscal Responsibility Act.
As regards the debt service to revenue ratio, he assured that as
our revenue situation improves that ratio will come down.
As the Minister emphasized “Nigeria does not have a debt
problem, as such. Our debt is within prudent limits. However, we
need to optimise our revenue generating potential. This will bring
down our debt service to revenue ratio. Given the size of our
economy we can, and should, be doing better, in revenue generation.
This explains our focus as a Government on revenues and revenue
generation.”
With regard to the complaints that the budget was small, the
Minister explained “Some commentators have complained that the 2019
Budget Proposal is too small. They would like us to have a larger
budget. All of us in Government would also like Nigeria to have a
larger budget. Indeed as our revenues grow we will be able to
expand our budget size. In truth, though we have increased our
budget size significantly since we took over Government in 2015,
our budget size is still far too small to meet all our needs.
“However, we are limited by the size of our revenues. Our
current proposal for 2019 represents the maximum size that we
believe we can prudently fund from our revenue and debt sources.
There is no point announcing a large budget that you cannot fund.
As we are able to generate more revenues in future we will be able
to continue to increase the size of our budgets.”
Also speaking on the issue of unemployment, the Minister
explained that Government was working hard to improve the enabling
environment for economic expansion which will lead to the creation
of additional jobs. He was confident that as the various
initiatives of the Economic Recovery and Growth Plan (the ERGP)
continue to be implemented we will be able to create jobs at a rate
that is much faster than population growth, thereby bringing down
the unemployment figures.
“Most of these jobs will be created in the private sector
particularly in agriculture, construction, manufacturing, trade and
services. He pointed out that many of the major economic indices
are showing signs of improvement. These are the reasons the
Minister indicated that he is very optimistic about the future
development trajectory of the country.
Signed
Akpandem James
Special Adviser (Media) to the Hon. Minister