INTERVIEW: Minimum Wage Should Be Adjusted With Inflation Rate Annually- TUC President

The National President of the Trade Union Congress of Nigeria, Comrade Festus Osifo, in this exclusive interview with Kasarahchi ANIAGOLU of THE WHISTLER, spoke on the challenges surrounding the recently approved N70,000 minimum wage, the Tax Reform Bill, and the alleged negligence of government institutions in ensuring workers’ safety.

Osifo, who also serves as the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), also outlined actionable solutions to enhance PMS affordability and accessibility for Nigerians, the TUC strategic vision towards preparing workers for the future of work.

As President of the TUC, what is your primary vision for strengthening the labor movement in Nigeria and how is it being achieved?

For us in labour, we literally play the role of labour ministry and federal government, where we are effectively overworked. If you look at some policies of government for example on expatriate influx in another clime, the people that should enforce that companies should not bring expatriates into Nigeria would be government. They have set up institutions like Nigeria Content and Monitoring Development Board (NCMDB) that would approve the number of expatriates that comes into Nigeria, we have the Ministry of Interiors that further gives validation for expatriates influx.

But these people are not up in arm about what they ought to do. So, what has now happened over time is that labour is now the sole championing system that champions issues on expatriates quota. Labour is now the one addressing issues relating to safety standards in companies. There is a department under ministry of labour that should be enforcing safety standards, but how many times have these people visited these companies, but it is the labour unions, that are championing that. Also, we have the Issues about the economy.

So, you see lots of issues that ought to be government institutions, who should be responsive in carrying some of these functions, but they are not doing their work and in turn becomes the labour unions responsibilities.

For example, if you visit Angola, and work for three years, you can never renew your permit, you have to leave for a certain period of time before returning. In Nigeria, we have such policies that outlines the duration of time expatriate should work in the country with a maximum of four years period, but we have expatriate that have lived here for more than 20 years and counting.

This is because the institution that should enforce some of this are not operational, all these have fallen on labour automatically becoming our responsibility.

In Gabon, Shell was exiting, in the process, the Minister of Petroleum in Gabon, negotiated, fought Shell to do what needed to be done. The minister put his feet to the ground and ensured that incentives and other benefits due to worker were implemented. In those places you have government institutions protecting the workers, but here, the reverse is the case.

So invariably, over the years, it is labour that has stood in the gap, that will do the job of the ministry, that will do the job of institutions of government, that will do the job that labour ought to do. So generally, I could say that it’s been “comme ci, comme ça”, we’ve pushed, we’ve fought, we’ve advocated. And even today, since we started practicing democracy, labour on its own, in some cases, are even referred to as opposition government, because even the opposition has crumbled.

Nigerian workers are grappling with inflation and eroding purchasing power, what specific step is the TUC taking to address these challenges?

Yes, there are advocacy that we have mounted since January 2024, because we went to the root cause. What’s actually the root cause of the inflation that we are having? We identified singularly that the root cause to this inflation is actually the devalued naira, because the reason you are buying iPhone today for N2m is because the Naira is weak.

When the exchange is about N360, you could buy a new iPhone for around N500,000. But today it is four times the price, because of the naira devaluation. So, we made a lot of proposals. Sometime in April 2024, we advocated again in June, we came back again around August, and we have been extremely consistent on this that government must do everything possible to address the issues surrounding exchange rate.

Until that is addressed, a lot of these things today that are up there, they will not calm down. If your exchange rate is weak, it erodes the purchasing power and it also causes inflation.

We are quite happy that this year, government has projected 15 per cent for inflation. But we think that, if we achieve that 15 per cent is excellent, but with what is on ground, they have to work over and over again to be able to achieve the 15 per cent inflation rate that is projected for this year.

So, on our part, we continuously advocate, we continuously look at those dynamics that will help the Nigerian workers and one of them is actually agriculture. Because today, some farmers couldn’t go to their farms, if you go to Benue, Zaki Biam, a lot of those places where they produce yam, produce lots of staple foods, they can’t access their farm today because of insecurity.

So, part of the advocacy that we have also mounted is for government to do everything possible to restore security to those areas where you have massive farms so that when farmers return, they should be supported both in terms of soft loans, they should be supported in areas bordering on fertilizers and all that so that when they produce this food, it will inevitably reduce the cost of food because we know that food inflation is the highest inflation today.

It’s one of the drivers of inflation. The last time, inflation was about 37 per cent. Food inflation would be 47 per cent. So it drags the inflation upward. So, when that is addressed, it will go a long way in ameliorating the economic challenges we are facing today.

What is the TUC stand on the current minimum wage and do you believe it reflects the economic realities posed on workers today?

Like the analysis we’ve done, there are underlying principles that govern minimum wage conversation and that underlying principle is inflation. We did an analysis, when the last minimum wage was done, I mean approved in 2019, what was the inflation? So, if you calculate that inflation in 2019, you compound it 2020, 2021, 2022, you compound the inflation. You will see that the inflation over these years is about 77 per cent. If it’s 77 per cent and when you compound further, the inflation will give you N75,000. Where we ought to be using the inflation is N75,000 as the minimum wage. But we achieved N70,000 and that gave about 90 per cent performance. So, the desirability would have been N75,000 because if you calculate your inflation from when the last minimum wage was approved till today, what that means is that you take inflation of 2020, you apply it on 30,000, you take the inflation of 2021, you apply it on that sum, you keep applying it.

What you are going to have by April 2024 would have been N75,000. So, that means if we had achieved N75,000, we would have achieved a 100 per cent coverage for inflation.

But the real question is this, the inflation that they dish out from the National Bureau of Statistics (NBS), does it reflect what we see on the street? When you check what was the price of rice last year and what is the price of rice today, you can see that it’s moved by close to 100 per cent.

When you check what was the price of tomato last year and what was the price of beans last year, when you do that on your own in your little corner, you are going to realize that even this inflation that they call 33 per cent it doesn’t reflect what the ordinary Nigerians are facing.

But when you go to the table to have conversations on minimum wage, the official data that they are going to bring is the inflation figure from NBS, not what you perceive in the streets.

So, if you use the official figure from NBS, as of when we are negotiating minimum wage, it could have been N75,000, that would have given us 100 per cent performance.

But realistically, what we are facing down there in the market, what we see in the streets does not really reflect the inflation level as read by NBS.

So, I would say invariably that why on paper, we achieved 90 per cent of inflation when you compare from 2019 to date, but realistically, what is there on the street is much more severe than the inflation that we felt that we have achieved.

Going by your analysis on inflation impact and minimum wage, would the TUC again be advocating for wage adjustment or subsidies to ease the burdens on workers?

Yes, what we have been pushing at work is that government doesn’t necessarily need to wait for the next three years to maintain the minimum wage. Why can’t we be adjusting for inflation annually?

So, what that means is that by now we have N70,000 minimum wage. So, when we get to January, for example, we could look, what is the inflation in January? Or we could take it, the last minimum wage was approved in July 2024, one year down the line, what is the inflation rate? You apply the inflation rate on the N70,000, it gives you a new value. So, when we get to 2026, we do the same thing.

When we get to 2027, we also do the same thing. So, if you do it like that, that adjustment could assist the Nigerian workers in wading through the inflation, rather than waiting for another three years in this case for the negotiations to be done.

Industrial actions have become a recurring decimal in Nigeria. How do you balance strike as a tool for negotiation while minimizing disruption to the economy?

For every strike that you see, we’ve had over hundreds of agreements. So, you only see strike, right? Okay, the last time you saw strike, you know, maybe it’s like three, four months ago, right?

But between that three, four months till now, I can tell you from Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) standpoint that we may have signed over 30 collective bargaining agreement on how the workers welfare will be improved.

We’ve gone to Chevron and we have achieved huge salary increments. We are currently doing negotiations now in Total energies. In Exxonmobil that Seplat just bought, we were able to give them three digits increment in salary unprecedented in the history of trade unionism.

But we don’t come to press to announce it. So, for every destruction you see, there are hundreds of agreements, hundreds of MOUs, and hundreds of collective bargaining conversations that are going on.

As the PENGASSAN President, you recently visited the Port Harcourt refinery, can you share some of the things you experienced at the facility?

Yes, we went to the refinery. So, we went around the old Port Harcourt refinery. And when we went around the refineries, we saw lots of improvements that have been done. We inspected some of the equipment, the heat exchangers, the compressors, the turbines and we went across all of them, and we saw that most of these, they were quite new when they were installed. And we could see actually that the plant was running, the flare was on, the processing unit was firing.

We went to the control room, and from the control room, you could see the simulations, you could see the display of the production processes. So, we went around the process plant, and we confirmed that the units, they were working, and that the process, they were all firing and they were all working.

That’s the old one. We also went to the new Port Harcourt refinery, where the contractor told us that from their work breakdown structure, that about 90 per cent has been achieved in terms of completion.

So, we still have about 10 per cent to go. And we tried to inquire when it will come on stream, but they were reluctant in giving a specific date. But we are also following up, because we have our members there from PENGASSAN and NUPENG’s standpoint to ensure that the new Port Harcourt refinery come on stream.

How would the operation of the Port Harcourt and other refineries impact the prices and availability of petroleum products in Nigeria?

What affects the price of petroleum products majorly Is the price of crude. But because the price of crude is priced in dollars, so you need to convert that price of crude sold in USD to your local currency, and that is where the exchange rates will come in.

The price of crude needs to come down, and our exchange rate needs to come down for us to achieve a lower pump price. But if the price of crude hovers between $70 to $80 per barrel, I’m afraid we will not be able to achieve lower product prices, because our exchange rate is relatively weak.

As of today, we do not have control over the price of crude, because it is internationally set. Even when Dangote is purchasing in naira, but it’s still the dollar equivalent.

So, if the international market is selling or you have a contract with NNPCL that they have to supply crude at $80 per barrel. But instead of you to pay $80, you then multiply $80 by N1,600, and pay the naira equivalent, tt doesn’t still remove the fact that it’s still $80, but you are paying the naira equivalent of $80. But if the price of crude now comes down from $80 to about $50, then what will now happen is that instead of you multiplying N1,600 by $80, you will not multiply it by $50.

So that will reduce your feed stock, because crude contributes, price of crude contributed by 80 to 90 per cent of the cost of production. So, when the price of crude comes down, it will help.

So, these are the two principal things that will literally affect the price of crude coming down. But the advantage of you having a local refinery is that you will eliminate the logistics cost.

If, for example, you buy crude or your product from Rotterdam or from China or from Austria or from Malta, you will now have to ship them in. So, now you have eliminated that logistics cost because you are producing locally.

But beyond the price, producing locally as well is also empowering Nigeria, because as of today, you have Nigeria that is working in the refinery.

With the activities of maintenance in the refineries, we have over 2,000 Nigerians working there.

With the rise in technology, automation and remote work, how is the TUC preparing Nigerian workers for the future of work?

Invariably today, we know very well that Artificial Intelligence, for example, is creeping into our operations. But in Nigeria, we are still a little bit far off. But what we have also done is to empower our affiliates. Most of the affiliates will be championing the issues of future of work, because TUC is the center. So, all we do at times is that we look at specific issues and we encourage the affiliates to take key steps.

PENGASSAN, for example, in the last three years, we’ve been hosting a PENGASSAN Energy and Labour Summit. And in that summit, what we do majorly, I mean, the first summit, we talked about energy transition.

We try to look at the system beyond crude. If today crude is no longer a growing concern, how will our members remain relevant? Then this year, we focus much more on Artificial Intelligence, how will they impact our work?

Today you could have a field operation in Nigeria, and that field operations could be remotely controlled from China, remotely controlled from Paris, remotely controlled from Houston. So how do we fit into all this? So that sensitization is on, but we will double our efforts on it.

How would you describe the relationship between the TUC and the Nigerian government? Is there a mutual understanding or frequent conflicts?

It depends on the issues. Today we have the four bills on the tax reform and it is before the National Assembly. So, we have some issues that we are putting together that we will take to the public hearing and carry out our advocacy. So, we are specific on issues. When the issues are right, we align, When the issues are not right, we shout and we agitate.

Remember, when they wanted to bring the cybercrime levy, although they said that the circular that came from Central Bank of Nigeria (CBN) was not the interpretation of the law. Still, TUC we are at the forefront.

We mounted the rostrum, we had press conferences, and we went to different media houses to press on why Nigeria should not be further burdened. And they listened to us. At the end, they withdrew this circular and all that.

So when it comes to advocacy, we are very strong on that. When it comes to areas to collaborate, we will collaborate. When we also have areas of differences, we are not also shy to champion our cause and state what we truly believe in.

The public service rule 2021 edition was pushing for a two-year tenure for labour leaders, what is the current position on that demand?

No, I think that is misconstrued actually, I am from the private sector, but it was talking more of the public sector. But we’ve made our position known clearly, public service does not regulate labour unions.

They don’t have any say on what we should do in terms of labour union. So they have no say. We have our respective constitution that was approved by the people.

So if the people wants it to be two years in respective delegate conferences, or the various affiliate is going to make that note or the two centers. But for public sector, they don’t have any business with that, and we are very strong on that.

Following the many controversies emanating from the tax reform bills, what is the TUC position on the proposal of the government?

The tax reform bill is huge and wide, there are good things in the tax reform bill and there are things that are not also too palatable.

For example, those around the minimum wage will not be taxed, those that earn N800,000 per annum salary, plus N200,000 allowance, making N1m will be exempted from tax.

But we are saying that, yes, we welcome that. It’s a good development, but you need to increase that net to maybe those earning up to N2.5m per annum. Then the ones for SMEs that are into business and their turnover is less than N50m that they will not be subjected to tax.

We love that because most of the small and medium-scale enterprises, the nano companies, all fall within this, the barber shop, the hairstylist, and the welders all fail in this category.

So, if that tax bill actually scales through, what that means is that most of the enterprise you see across the street, they will not pay tax and will be exempted from tax.

And the money you don’t pay as tax will go either back to your business or you could use it to maybe for your children, for yourself and all that and also increases your disposable income.

So for us, those are some positives. But there are some things that we are also looking at, things like increment in VAT. So, our advocacy is why don’t you broaden, the tax net, bring in more people because the collection rate today is quite low.

So why don’t you improve the efficiency of collection so that more people will pay rather than increase the rates. Some areas, we don’t quite agree. Some areas, we are okay. So we will come up with all these through the public hearing and make our presentation and our position known.

What legacy do you hope to leave as president of the TUC? And what long-term changes would you like to see in the Nigerian labour sector?

So, I don’t want to talk about legacy now, maybe when I’m leaving we can talk more about that. But one thing is, what could have been key is for the institutions of government that are responsible for certain things to be up and doing, issues about expatriates been blocked.

I also mentioned some lapses in this system that governments on their own and their institutions ought to be championing, but they are not carrying out those functions as they ought to be today.

So, one of the desires that we have is that these institutions should be strengthened, these institutions should be remolded so that they will be much more efficient, because when they are efficient it also helps our own activities.

Moreover, one of the things we’ve tried to do is training and retraining, because you cannot prepare for tomorrow if you are not well trained today. So that is why we are deepening access to training for our leaders across the state and across the affiliate level because you cannot do much more than the knowledge that you have.

Again, you cannot solve tomorrow’s problem with yesterday’s knowledge, so you need to be updating, because the government officials that you are relating with, the management that you are of different companies that you are relating with, they update their skills, they go to Harvard, Stamford, Yale, MIT others to update their knowledge, and when they come they use some of these skills in relating with you, and you may not know.

So if you, as a labor leader, who negotiates for the people, if your knowledge is not updated, if your skills are not improved, then it has a way of rubbing off on the people.

So that is why we are very strong in training and retraining, and by the grace of God will continuously push for that coming year.

INTERVIEW: Minimum Wage Should Be Adjusted With Inflation Rate Annually- TUC President is first published on The Whistler Newspaper