According to Labour Minister Chris Ngige, the outgoing government in Nigeria has advised the next administration of President-elect Bola Tinubu to increase salaries for public sector employees after eliminating fuel subsidy in June.
President Muhammadu Buhari, who steps down in May, had planned to eliminate the costly subsidy in 2022 as part of fiscal and petroleum sector reforms, but abandoned the plan because of worries of demonstrations in the run-up to last month’s election.
Past Nigerian governments have pledged to end the fuel subsidy, which most economists agree is an unsustainable burden on the country’s finances, but they were unable to do so due to vehement public resistance. “We have already reached a conclusion regarding pay increases, and we suggested 5% and 10% pay increases for workers in various categories”, according to Ngige.
Although if the previous administration itself failed to remove the subsidy, the call puts pressure on Tinubu to keep his campaign promise to do so, even though the new administration is not required to follow the advice. During his presidential campaign, Tinubu, a member of the same political party as Buhari, also pledged to increase oil production and deregulate midstream gas pricing within six months.
According to Tinubu’s manifesto, he will invest the money saved on the subsidy on public transportation subsidies, road building, social welfare, agriculture, education, and healthcare.
Nigeria set aside $7.3 trillion (3.36 trillion naira) to spend on the subsidy until mid-2023, according to its finance minister.