N50,000 Stipend for the Youth Corp: Is It True, Or Even Wise? -By ‘Tope Fasua

Filed under: National Issues |

Let me start by commending Acting President Osinbajo. I heard that while President Buhari was out in London, he started revisiting the issue of tenure for permanent secretaries, directors and other big shots. While Umaru Yar’Adua reigned, he signed into law a recommendation by the Oronsaye Committee, that these big cats in the civl service should not serve more than eight years. Why? Not only were they too many, too greedy and corrupt, but also there was an increasing queue of competent people who needed to be given a chance (to serve, not to steal). Many hated Yar’Adua for acceding to that idea, and immediately Buhari came, they whispered sweet nothings in his ears and he reversed the rule. That was one of the decisions which lost the anti-corruption war for Buhari before it started. It was one of the reasons I knew the man will achieve nothing. His idea of governance is locked in 1984.

Those who whispered to Buhari told him the eight-year limit makes people steal. But we know people who stayed in positions for 15 to 20 years in this country, did precious little and were utterly corrupt all through. Buhari’s courtiers also brought in the religious and tribal angle, by saying it affected a certain group of people. Na wa! Anyway, let me also congratulate Osinbajo for visiting the site of a collapsed building in Abuja, in a matter of hours. He also asked for a review of the notorious Special Anti-Robbery Squad (SARS). The man has much ‘action’.

But there is a big problem, in my view, about to erupt. I have been thinking of the implications of the government increasing the stipend for youth corpers to N50,000. It was announced at one of their public outreach programmes (POPs) and the corpers cheered; with many chanting ‘APC! APC!’ Now this is an election year and the party is desperate for a come-back. Now, it is mostly youth corp members who help in conducting elections. So if the corper members are to repay a favour, the elections should be a clean sweep for the party. It will therefore be unpopular for anyone to push for government to slow down on this idea a bit.

My first worry is that as an entrepreneur, this will put me in a very tight corner. It’s tough paying salaries month after month and now this. I manage to get a few youth corp members to work with me every now and then, and we pay them N30,000 monthly. With the additional N19,500 they collect from the government for now, they live a decent life. If I continue paying N30,000 then they’ll be earning more than some of their colleagues who had finished service for years. So we as entrepreneurs will come under immediate pressure to increase salaries by a considerable percentage across board. Where will the money come from? Is government not disconnected from reality? I understand though that many companies – including government agencies – take these young corp members and refuse to pay them at all, for a whole year! We have so-called entrepreneurs in this country, gallivanting around as ‘big boys’ but who owe the small people who work for them for months! I believe those people will get their just desserts. So if for the fact that many organisations now see youth service as free labour, it is indeed in order to increase the stipend. But by almost 200 per cent? That is a lot.

 

Tope Fasua

In Nigeria we never increase things in small proportions. Government last increased electricity tariffs by 45 per cent. Petrol increased from N87 to N145. When government itself does not understand the implication of increasing prices in leaps and bounds, and has no sense of propriety and measurement, we can least expect the private sector not to be desperate. But curiously, it is the government, and large private sector monopolies alone that can do such things. The Small and Medium-scale Enterprises (SMEs) are increasingly being crowded out of business. But who cares? Certainly not the government. We should institute a yearly increase in salaries that is commensurate to inflation instead. That makes better sense.

The very clear implication of this leap in the salaries of the youth corp members to N50,000 is that the minimum wage being sought by government workers is now a fait accompli. Minimum wage for the lowest full-time government employee is N18,000 presently. Many states are complaining that they cannot cope with this, and many still do not pay youth corp members a kobo. Now with the official stipend going to N50,000 by October, government must increase the minimum wage to around or over the same amount. It will not make sense for corp members to earn more than full-time workers, or to earn so much during that one year interregnum only for them to earn lower after completing service. So, the minimum wage should probably rise to N50,000 or N60,000. I had hoped that instead of increasing wages vertically, government should try and employ more youths into unskilled work like environmental and light security, but who am I?

Therefore a great inflation is coming, as it usually doe, to take the money from the hands of the workers, and the corpers, and to make those who are unemployed and underemployed even poorer. Many will become emaciated and undernourished. The real issue with government is that they are under an illusion. Crude oil price is around $74, and Madam Kemi has borrowed billions of U.S. dollars into the next 30 years. There is an illusion of liquidity and prosperity. But it is like doing drugs. In the morning cold turkey will set in. In the streets we call it ‘jonesing’. And I reckon that the next ‘jonesing’ session will not be funny at all.

If these wages increase, our States will owe even more months of salaries. A clear implication may be a further devaluation of the naira, so that $1.00 becomes N600 and the allocations received by state from federal looks bigger and covers more salaries. It’s like pouring a drum of water into your stew. It looks plentier but the taste is gone. It’s not as it Nigerians have not suffered enough. Naturally, inflation will climb up with that much velocity of money in circulation (and we are talking stagflation and hyperinflation), and with this, interest rates will go up as the nation gets enveloped in liquidity that is unmatched with higher productivity or any improved economic complexity. By economic complexity I mean we haven’t yet gotten many industries going and aren’t as yet producing much of the things we consume. As entrepreneurs are forced to increase salaries, they will be forced to lay off staff, and many companies will simply fold up. Companies that can unionise and increase prices commensurately (or even game the system) are in a better position, but lone wolves will be isolated and devoured. With a combo of higher inflation, higher interest rates, job cuts – higher unemployment, are we not going to be back in another recession or depression this time? These are indeed signs of economic depression. Add to these the fact that with state governments being under more pressure to pay staff, and owing more, basic government services will suffer. Hospitals will become morgues the more. Strikes will become rife.

I wish I’m wrong. If there is a better analysis out there, someone should enlighten me. I don’t like the idea of that much increase in the stipend of corp members – and that is not because I earned only N550 per month in my time in 1992. Why not increase from 19,500 to say N25,000? Or a maximum of N30,000? Has government considered the full implications of this? Is it even true? I have seen this country walk into many sucker punches in the past. I have seen us take very stupid decisions and then go crying to God to save us! Yes, our lives as a people has been about lurching from one crisis to the other. Are we setting ourselves up for another major fail? Who will we blame if it pans out exactly the way I have imagined it will and majority start gnashing teeth? What happens if crude oil falls and when shylock creditors start demanding their pounds of flesh? Already 60 per cent of our revenue is being used to service debts. Is this sustainable? What sort of economics is this? And if government knows some magic rabbit that it is about to pull out of its hat, it should let us in, so that we can plan. Nothing helps entrepreneurs more than the ability to plan. Nothing kills them like bad surprises. And they’ve had too many in this space.

‘Tope Fasua, an Economist, author, blogger and entrepreneur, can be reached through [email protected]

 

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