The agitation for pay reform has been an important and recurring theme in the Nigerian public service as real salary levels have declined considerably in the past following high rate of inflation in the country. Workers have found it increasingly difficult, if not impossible, to survive on their monthly pay in the face of changes in market conditions and high rates of inflation. The concept of a cost of living wage has gained popularity, particularly where public servants pay levels are perceived to have fallen below levels necessary to meet their basic needs of life, e.g., food, clothing, shelter, and social amenities.
Matters were made worse by the gradual and steady distortions of the Unified Grading and Salary Structure (UGSS) brought about by the Udoji Commission in 1974. Again, the relativities between salary grade levels were substantially disorganised. The distortions have been further exacerbated by the emergence of several salary structures in the federal public service. Consequently, the issue of relativity among jobs within or between occupational groups in the public service has become one of the major challenges in Nigerian public administration. This development has generated a rash of agitation by occupational groups and institutions to migrate from one salary structure to another or for new salary structure. Over the years, the system has witnessed incessant strikes and threatened strikes as bargaining weapon for settling emolument relativity questions.
Reform Actions
In an effort therefore to reform the pay structure in the public service, the federal government set up two committees. The first was the Wages, Salaries and Emoluments Relativity Panel under the chairmanship of Professor E. C. Edozien, (OFR), which was set up in June 2004. It was charged with the responsibility of addressing the problem of growing disparity in salaries and wages payable for work of substantially equal value within the public service, as well as between the public and private sectors. The second was the Presidential Committee on the Consolidation of Emoluments in the Public Sector under the chairmanship of Chief Earnest O. A. Shonekan, (GCFR, CBE), which was set up on November 2005.
The highlights of recommendations of the two committees were as follows:
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The Edozien Panel recommended that workers’ pay should be index to inflation and
reviewed every two years.
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The Shonekan Committee recommended that public sector wage should be increased
by 25% in 2007 and a further 10% annually (plus cost-of-living adjustment) for the
next 10 years. Full implementation of the Shonekan recommendation was likely to
result in significant growth of the payroll component of the federal government’s
recurrent budget; the wage bill would have accounted for 35%, 45%, and 45% of the
national budget in 2007, 2008, and 2009 respectively.
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The White Papers from both Committees recommended a comprehensive evaluation
of Jobs in the public service.
Main Achievements
The main achievements of the pay reform are as follows:
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The consolidation of salaries in 2007
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The implementation of salary pay rise of 15% in 2007
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Adoption of ₦18, 000 new national minimum wage through the New National
Minimum Wage Act 2011
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Introduction of incentives for reforms through year-by-year pay review for those
MDAs that had implemented reforms. Pay increase was only to be allowed for those
MDAs that have been certified as having completed their reform process. The
recommended reform areas that MDAs were to address include: (a) rationalisation of
MDAs to eliminate overlaps and duplications; (b) privatisation of more federal
government-owned companies; (c) improvement in the quality and reduction of the
quantity of the skills in the public service; (d) improvement in revenue generation
from non-oil sector, company income tax, VAT, etc.; (e) automation and centralisation
of public sector payroll; and (f) compliance with government agenda for public service
reforms.
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Increase in estacode and duty tour allowances
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Introduction of four new allowances; namely: Job-Specific Allowance (JSA) (recurrent);
Risk-Related Allowance (RRA) (recurrent); Relocation Allowance (RA) (one-off) and
Scarce-Skills Allowance (SSA) (one-off/recurrent)
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Government’s acceptance of the recommendation of the need for a comprehensive
job evaluation in the public service. In order to actualise this project, the National
Salaries, Incomes, and Wages Commission (NSIWC) in partnership with DFID-Federal
Public Administration Reform Programme (FEPAR) had developed a strategy document
on comprehensive job evaluation in the federal public service. As part of efforts to
enrich the document, NSIWC in January 2013 held a retreat with critical stakeholders
to elicit their input, which was to be used to update the content of the strategy
document.
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Government’s acceptance of the Edozien Committee’s recommendation that the
relatively low share of basic salary in total emolument should be addressed.
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Government’s acceptance of the Shonekan Committee’s recommendation on
cushioning the effect of an anticipated higher personal income tax. The specific
recommendations accepted are: (a) the introduction of a hybrid of an expansion of tax
band, introduction of threshold tax, and a minimum tax; (b) partial consolidation of
emoluments; and (c) introduction of tax exemption on gratuities and mandatory
payroll deductions (such as NHIS and NHF).
Reference: Public Service Reforms in Nigeria (1999-2014) - A Comprehensive Review
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