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South Africa gets new minimum wage of N126, 480 per month to shame Nigeria

While President Muhammadu Buhari is still ‘consulting’ the governors on whether to submit a proposal of N30, 000 minimum wage to the National Assembly for legislative action, President of South Africa, Cyril Ramaphosa has signed a minimum wage of N126, 240.00.

The new wage, which expected to benefit a whooping six million people that earn below R3, 700 per month would come into effect on January 1, 2019.

However, employers who are unable to pay the minimum wage due to constraints in their businesses will be eligible for exemptions

This comes as the President enacted four labour bills last week following heightened pressure by union federation of Congress of South African Trade Unions (COSATU)to finalise the legislation, especially the minimum wage bill, which COSATU considers a victory after campaigning for it for years.

Critics have warned that the law may lead to job cuts in an economy that is already struggling with unemployment of more than 27%.

The minimum wage law, which was formulated at the National Economic Development and Labour Council, has been in the works since 2015, with parties agreeing to set the minimum hourly wage rate of R20 in 2017.

Its initial implementation date was pushed from May 1 following a series of blunders during the bill’s drafting period.

In its initial response to the proposals, the Treasury warned that the system would affect jobs and the economy in the long term if it were to be implemented recklessly.

In addition to the minimum wage bill, Ramaphosa signed three other labour bills, including the Labour Laws Amendment Bill, which will enable the implementation of the Unemployment Insurance Fund (UIF) Act, and which extends a variety of benefits to retrenched workers; as well as amendments to the Basic Conditions of Employment Act, which will introduce various changes, including parental and adoption leave.

The president has also signed the Labour Relations Amendment Bill, which makes way for the establishment of an advisory arbitration panel to deal with long and violent strike action in the interest of labour stability.

However, it is the signing of the long-awaited minimum wage legislation, dubbed the most progressive labour law under the democratic dispensation, which has pleased organised labour.

According to the bill, a yet-to-be-appointed commission that must, within 18 months of the commencement of the act, conduct a review of the national minimum wage will adjust the minimum wage annually.

Indeed, like Nigeria that recently exited economic recession and has continually cited lull in its earnings as reason for not implementing a new minimum wage, South Africa has also been in danger of an economic recession but has taken a giant step towards putting more money in the hands of the South Africans with the hope of increasing household spending that should boost economic activities in the country.

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