President Bola Ahmed Tinubu’s N35,000 temporary wage award for civil servants has been eroded by the decline in the value of the naira, an analysis conducted by THE WHISTLER has revealed.
Tinubu had on October 1, 2023, announced the introduction of a provisional wage award and increment of N25,000 to enhance the federal minimum wage without causing undue inflation.
But the N25,000 was rejected by labour unions- Nigerian Labour Congress and the Trade Union Congress leading to the government to raise the offer to N35,000 and it will cover all federal workers.
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For the next six months from September 1, 2023, average low-grade workers and other government workers will be paid N35,000 extra to ameliorate the pains inflicted on workers by his economic reforms.
The pledge was finally approved in a circular signed by Tinubu and issued by the National Income and Wages Commission on Thursday, October 19 2023.
“I hereby convey the approval of the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria for the grant of a wage award of N35,000:00 (thirty-five thousand Naira) only per month to all Federal Government workers with effect from 1 September 2023 pending when a new national minimum wage is expected to have been signed into law,” it reads.
Implication Of Naira Devaluation
By October 1, 2023 when the President made the promise, the naira was trading at N1,008 per dollar at the parallel market which means that in dollar terms, the N35,000 award was worth about $34.7.
But the naira has since depreciated to N1280 per dollar as of October 24 which is 23 days after the president made the offer.
Consequently, the value of the N35,000 has fallen from $34.7 to $27.3 following the depreciation of the currency.
By implication, Tinubu’s N35,000 wage award has lost 21.2 per cent of its value in dollar terms from October 1 to October 24, 2023.
At the official dollar rate, the naira traded N769.26 per dollar as of the date of the announcement, implying that the N35,000 wage award was worth $45.49.
From the $769.26 traded on October 1, the naira has dropped to N832.57 based on the Central Bank of Nigeria official rate.
By implication, the value of the N35,000 has also dropped from being worth $45.49 on October 1 to $42.03 which has eroded the N35,000 wage by 7.6 per cent at the official rate.