Minimum Wage: Fashola Introduces Austerity Measures

[TGD]

 FACED with the challenge of rising up to the statutory obligation of paying the recently-introduced N18,000 minimum wage, the Lagos State Government has drastically cut down on other expenditures.

To this end, Governor Babatunde Fashola has declared that, henceforth, provision of TV sets, Cable TV decoders, overseas trips and training by government officials, as well as money spent on frills and jamborees, T-shirts, caps, foods and others, may be compromised.

These measures, contained in an Executive Order, which is believed to have been signed into effect by the Governor on July 12, indicated that the austerity measures are the first in the series.

Fashola said it has become expedient for the state government to strictly monitor the way money is spent on governance, as the impact of the minimum wage would no longer permit excessive spending.

The order, sent to the Head of Service, government ministries, departments and agencies, stated that the minimum wage has further depleted the fund available to the government for social services by N2 billion every month.

Lagos Government will need between N5.5 billion and N7 billion to pay its over 50,000 workers and political appointees. Against a monthly revenue profile of between N18 billion and 20 billion, salaries will gulp about 40 per cent of the state's expenditure.

The N2 billion rise in salary bill may just be a sign of the financial nightmare that the Lagos Government may face, if it implements the new salary structure across board, as being demanded by the unions.

Fashola also ordered the suspension of recommendations and grants of support for private or individual problems and sponsorship except for very deserving educational and medical causes.

The Governor, who, however, said the suspension does not affect the policy on payment of bursary and scholarships to deserving students, warned that conscious efforts must be made to manage the cost of training personnel both locally and internationally.

He promised that he would continue to reel out more ways to cut cost in the future, adding that "cost of telephone, long distance calls and utilities are some of the areas where we must improve our cost efficiency."



The Guardian