With the termination of a fuel subsidy in June, Labour Minister Chris Ngige said on Tuesday that the outgoing government of Nigeria has recommended that the next administration of president-elect Bola Tinubu offer wage increases to public sector workers.
As part of fiscal and petroleum sector reforms, President Muhammadu Buhari intends to abolish the costly but popular subsidy in 2022 when he left office in May. But, he abandoned such plans out of concern for protests before the election last month.
The majority of analysts agree that Nigeria’s gasoline subsidy is detrimental to the country’s economy, however past governments have failed to withdraw it despite vows to do so.
Although the government gets billions of dollars yearly from oil exports, many Nigerians believe the only benefit they receive from the government is cheap, subsidized gasoline.
Ngige added, “We have already reached an agreement on the subject of pay raises…we have proposed 5% and 10% pay increases for workers in different categories.”
The next administration is not required to follow the recommendation, but the suggestion does put pressure on Tinubu to fulfill his campaign promise to withdraw the subsidy.
Tinubu, a member of the same political party as Buhari, promised during the presidential election campaign to raise oil production and deregulate midstream gas prices within six months.
Tinubu pledged in his campaign platform to spend the subsidy savings on agriculture, social services, infrastructure development (including roads and public transit), social welfare, education, and healthcare.
Nigeria has allocated $3.36 trillion naira ($7.3 billion) to fund subsidies until mid-2023, according to the country’s finance minister.
