The organised private sector has said the proposed N100,000 minimum wage is not feasible as many small and medium-sized enterprises are already struggling under rising production costs and shrinking profit margins.
The OPS said it was therefore unrealistic to expect private sector employers to automatically match the N100,000 minimum wage being adopted by some state governments.
According to the business groups, while some large firms and thriving sectors of the economy could afford wages above N100,000, most SMEs were battling high operating costs, inflation, energy expenses and weak consumer demand.
The Nigeria Governors Forum recently said it was considerind a new national minimum wage of N100,000.
President of the Lagos Chamber of Commerce and Industry, Leye Kupoluyi, said the private sector should not be compelled to pay the same wage level as the government if businesses could not afford it.
He added that the government must address key economic challenges affecting businesses, including fuel supply for local refineries, poor road infrastructure and support for strategic industries.
Speaking in similar vein, Director-General of the Nigeria Employers’ Consultative Association, Adewale Oyerinde, said although the proposed increase reflected prevailing economic realities, it could not automatically become binding on private sector employers.
“We commend the state governments for proposing the increase of the minimum wage to N100,000. This seems plausible in view of the biting economic situation, made worse by the increasing cost of energy, etc.
“However, it should be strongly noted that the process for arriving at a National Minimum Wage is rooted in widely acclaimed tripartite negotiations and consultation and not just political statements, without any empirical data to back up the quantum of increase,” Oyerinde said.
Oyerinde further argued that reducing the cost of living would have a greater impact on workers’ welfare than what he described as an irrational increase in wages.
National Vice President of the National Association of Small-Scale Industrialists, Segun Kuti-George, said the proposed wage level might be suitable for public sector workers but was not realistic for many businesses.
President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, also warned that many SMEs lacked the financial capacity to immediately implement a N100,000 minimum wage.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said wage levels in the private sector differed significantly across industries, company sizes and locations.
Yusuf noted that sectors such as financial services, oil and gas, and information and communications technology already pay wages well above N100,000, with some organisations offering minimum salaries of N150,000 or N200,000.
