Following the World Bank’s recent disclosure that no fewer than four million Nigerians fell into the poverty trap between January and June 2023 and subsequent warning that another 7.1 million may plunge into the dungeon if properly targeted measures are not taken to manage the impact of fuel subsidy removal, anxiety is mounting over what will constitute the palliative package of the President Bola Ahmed Tinubu administration to the masses.
In time past, palliatives included purchasing of mass transit buses, increments in the minimum wage, social investments and empowerment schemes for unemployed persons.
While the mass transit buses were seen in urban cities such as Lagos, Abuja, Kaduna, Port Harcourt and a few others, the implementation of minimum wage was mainly a federal affair as many states could simply not foot the bill. This was even as the implementation of social investment and empowerment schemes were enmeshed in monumental corruption.
Amid the current hardship arising from the withdrawal of petrol subsidy barely one month ago, a socialist labour activist, Alex Batubo, believes labour must rethink its strategy to tackle the plethora of challenges confronting the working population.
“The strategy of the Nigeria Labour Congress (NLC) and the Trades Union Congress (TUC) over the last decade or so has included extended negotiations, limited strike threats and generally calling off strikes at the last moment. The assumption appears to have been that we have decent governments that only occasionally need reminding to do the right thing. We have corrupt governments that only work to further enrich themselves and their elite friends.
They rarely, if ever, implement any agreements that they have signed with the trade unions,” Batubo said. He alleged that the government has no care for the common people, stressing that the trade unions must talk to the government in a language that it understands, that hurts their pockets and frightens them.
He held that labour must literally ‘terrorise’ the ruling elite if they are to gain significant change and improve the lives of the people.
“The history of trade union struggle in Nigeria over the last decade has shown that we need a change of strategy by the NLC and the TUC. We need solidarity across the trade union movement and we need to continue the strikes until the government implements its agreements. Similarly, our experience has shown that strikes by NLC/TUC in individual states are not likely to win significant gains without active support across the working class,” he stated.
Expressing doubt over the government’s commitment to agreeing to a mutually beneficiary set of palliatives, Batubo declared that governments at the federal and state levels had repeatedly demonstrated that they were not prepared to implement agreements with the trade unions or even follow the law on payment of the minimum wage and pensions.
He maintained that the outcome of the two labour centres over the last decade is that the real value of the minimum wage has never been lower, salaries and pensions are routinely not paid on time and the costs of poor-quality public education and health services continue to rise.
“As a result, poverty rates have increased dramatically from around 40 per cent to 60 per cent and we have suffered a massive increase in insecurity. Our trade union strategy must change. We need militant class struggle trade unionism and solidarity across the movement until we win significant changes,” he said.
Deputy General Secretary of the African Regional Organisation of the International Trade Union Confederation (ITUC-Africa), Akhator Joel Odigie, agrees that a good set of palliatives is desirable at this point.
He, however, wondered why Nigeria could not follow the footsteps of former Libyan strongman, Muammar Gaddafi, who sold petroleum products to other countries under cost-friendly arrangements.
He cautioned against demonising subsidy, saying: “There is nothing wrong with subsidy per se. Several OECD governments still subsidise agriculture. Also, we see African governments giving direct tax concessions (subsidies) to big businesses and High Net Individuals (HNIs) under the guise of attracting Foreign Direct Investments (FDIs) through Export Processing Zones, Special Processing Zones, etc.”
He insisted that the development of the palliative packages must genuinely involve organised labour and other stakeholders inclusively, adding that talking that engenders pragmatic alternatives is critical just as talking with organised groups helps to aggregate voices of the different constituencies.
Accordingly, he rated increase in minimum wage highly; noting that payment of living wages helps fight poverty and inequality.
“Let me be clear, minimum wages are not essentially for formal sector workers, but more necessary for workers in the informal economy who are seldom excluded from trade union collective bargaining coverage. Minimum wage is an anchor to prevent wages from falling to unacceptable levels,” he added.
The announcement of the suspension of excise duties by President Bola Tinubu received high praises from Odigie, who argued that it is critical to reconsider Value Added Tax (VAT) application. He also noted that Nigeria needed to have fewer taxes on essential commodities – food, medicines and education materials.
“To improve financing the budget against the imposition of austerity measures on the back of the poor, government must be bold and fair to impose wealth/luxury tax. It can also consider a sin tax to discourage harmful practices. VAT on luxury and harmful but not outlawed goods (alcohol, cigarettes, luxury goods and estates) can be hiked to over the 10 per cent range,” he stated.
He also charged the Federal Government to focus on mass transit infrastructure development across cities and communities especially rail transportation devoid of contract padding.”
“It is also essential for the government to consider the construction of referral health facilities across the six geopolitical zones every two years and stock the facilities with cheap and readily available drugs and essentials,” he added.
To a former Director-General of the Nigeria Employment Consultative Association (NECA), Segun Oshinowo, while the Nigerian poor population has long been on ground zero, the new economic putsch may lead to the emasculation of the middle class.
He said: “The poor have long been on ground zero and probably used to a grinding life of suffering and survival. It is the middle class that is now being emasculated and pushed to join the poor on ground zero. Suddenly, the income level, which has always provided some refuge is now under serious siege by inflation and a sudden surge in cost of living.”
According to him, as needful as neoliberal economic policies are to correct distorted market dynamics, such will only further pauperise the citizens not only in the short term but into the long term if it fails to create new jobs and protect existing ones especially if it is not backed by social policy reforms that will provide sustainable palliatives for the poor and the middle class.
Oshinowo added: “There is certainly an exigency for general wage review in the formal sector of the economy lest consumer expenditure suffers with its negative impact on GDP growth rate. I am hoping in the coming months if indeed this government knows what it is doing, there should be well-articulated and clear social policies and programmes whose execution should be backed up with the same speed with which the neo-classical economic policies have been executed.”