One of Nigeria’s foremost policy groups, the Independent Media and Policy Initiative (IMPI) has picked holes in demands by the Nigeria Labour Congress (NLC) for increased salaries and allowances to workers in the aftermath of the conflict in the Middle East.
Organised Labour had amongst others demanded payment of wage award and new allowances for all civil servants to cushion the rising cost of living as well as suspension of taxes for low-income earners from the expected windfall from the surge in oil prices.
But in a policy statement signed by the IMPI Chairman Dr Omoniyi Akinsiju, the think tank insisted that NLC demands were inappropriate against the background of what the administration had been doing since 2023.
It added that NLC’s position amounts to sacrificing long-term economic success for short-term benefits for a few people.
IMPI said: “Oddly enough, this plethora of demands by the NLC was predicated on the recent projections by the Nigeria Economic Summit Group (NESG), signifying that the country may gain an estimated N30 trillion oil wind fall from the ongoing Middle East crisis. We consider this proposal rather inappropriate in the context of the age-long principle that admonishes that ‘one cannot eat the seeds and expect to reap a harvest.’
”The principle underscores that consuming resources (time, money, talent, etc.) intended for growth prevents future returns, in line with the biblical concept of reaping what you sow. It advises against sacrificing long-term success for short-term gratification.
”Against the thrust of this principle, the implication of the NLC’s demands is an insistence that the Federal Government share with workers the anticipated N30 trillion that may accrue to the federation. However, in our opinion, this N30 trillion, if it truly crystallises as projected, holds the key to galvanising the growth of the Nigerian economy compared to any possible outcome that would be recorded if shared with formal sector workers under the ambit of the NLC.
“The fact of the matter is that formal workers represent just about 15 per cent of Nigeria’s total workforce, with over 85 per cent engaged in the informal economy. With a total labour force exceeding 113 million, who will care for the more than 96 million Nigerians in the informal sector if those in the formal sector alone share the anticipated windfall from the Middle East crisis?
” We find the NLC’s proposal at this time myopic, especially coming from a workers’ union with a history of engagement with various governments and, ostensibly, has an understanding of the undercurrents of the national economy at different times.”
IMPI also noted that in spite of an increase in fuel since the outbreak of war in the Middle East, Nigeria is not under any threat to its economy.
”We agree, in fact, that since the commencement of hostilities in the Middle East, there has been an increase in the cost of living of Nigerians because of the 34 per cent rise in the pump price of premium motor spirit (PMS) over the last three weeks, with attendant spill-over on the cost of transport and logistics. Nonetheless, we are quick to insist that the historical circumstances that causally enfeebled the Nigerian national economy at the first sign of global oil market disruption no longer obtain in the current form of the Nigerian economy under the President Bola Ahmed Tinubu-led federal administration.
“We recall that between 2000 and 2015, there were several global oil price surges, peaking near $ 110 in 2011-2014. However, the increased revenue to the national coffers in those years merely accrued at the expense of domestic petrol scarcity, due to heavy reliance on imports and a corruption-laden subsidy regime. For context, we note that fuel prices rose by more than 90 per cent, from ₦22 to ₦40 per litre, between 2002 and 2003, amid significant supply disruptions across the country.
“Again, between 2007 and 2008, due to a global demand surge, crude oil prices hit record highs. This was accompanied by massive fraudulent subsidy payments to petrol importers, which, unfortunately, resulted in large fiscal deficits despite high revenue. This scenario was further reflected between 2011 and 2014 when oil prices skyrocketed again.
