Nigerian workers and several civil society groups, including traders and students, staged nationwide protests on Monday, February 26 and Tuesday, February 27, demanding that the government address the country’s escalating economic crisis. From Lagos to Maiduguri and from Abuja to Benin City protesters marched peacefully, holding placards during a protest against the recent raise in cost of living/economic hardship across the country.
Living and transport costs in Nigeria have risen since President Bola Ahmed Tinubu ended a fuel subsidy as part of reforms aimed at cutting the budget deficit in May last year. Also, the devaluation of the Naira has increased the cost of goods and services.
“We are hungry. There is hunger in the land. There’s nobody that doesn’t know this. You can’t buy anything. Bread is out of reach,” said Nigeria Labour Congress (NLC) President Joe Ajaero during the protest in Abuja.
According to the National Bureau of Statistics, inflation in Nigeria, Africa’s top oil producer, shot up to almost 30% last month, the highest level in nearly three decades.
Last October, the NLC and Trade Union Congress (TUC) declared an indefinite strike in response to the government’s “unwillingness” to address rising living costs. The plan was called off when President Tinubu announced an increment in the salaries of lower-paid state employees, raising the minimum wage to 55,000 naira ($71).
The labour unions have accused the government of failing to deliver on the commitments in the agreement, including payments of N35,00 for three months to some 15 million vulnerable households between October and December of last year.
On Tuesday, the NLC announced it has suspended street protests for Wednesday, February, 28 after achieving “overwhelming success” and meeting the “key objectives” of the two-day demonstration on the first day. The coalition said it has given the government a 14-day deadline, which expires on March 13, to fulfill pledges made in the October agreement.
In Nigeria, the issue of the minimum wage has always been a contentious one, with workers clamoring for an increase to match the rising cost of living. The high cost of living has placed a significant burden on the average Nigerian worker, making it imperative to reassess and adjust the minimum wage to ensure a decent standard of living. This essay aims to explore the essence of a new minimum wage in Nigeria, considering the challenges posed by the current high cost of living.
Nigeria, like many developing nations, has experienced a steady increase in the cost of living. Factors such as inflation, rising food prices, housing costs, transportation expenses, and healthcare expenses have contributed to the financial strain faced by ordinary Nigerians. The existing minimum wage, which stands at 30,000 Naira ($75) per month, is grossly inadequate to meet the basic needs of individuals and their families.
The inadequacy of the current minimum wage exacerbates the poverty levels and income inequality in the country. Many workers struggle to afford basic necessities such as food, shelter, education, and healthcare, pushing them into a cycle of poverty. This situation is particularly dire for low-skilled workers, who make up a significant portion of the workforce. A new minimum wage is essential to bridge the gap between the rich and the poor, promoting social justice and reducing income inequality.
A fair and adequate minimum wage is crucial for maintaining a motivated and productive workforce. When workers are compensated fairly, they are more likely to be satisfied with their jobs and perform better. A new minimum wage would provide workers with a sense of financial security and stability, enabling them to focus on their work without the constant worry of making ends meet. This, in turn, would enhance productivity, efficiency, and overall economic growth.
Also, insufficient wages often force workers to rely on social welfare programs, putting a strain on government resources. By increasing the minimum wage, the government can reduce the burden on the welfare system and promote self-sufficiency among workers. When individuals earn a decent wage, they are less likely to require financial assistance, freeing up resources to be allocated to other developmental projects.
Similarly, a new minimum wage can play a crucial role in stimulating economic growth. Increased wages lead to higher disposable income, which, in turn, boosts consumer spending. This increased spending creates a multiplier effect, generating demand for goods and services and stimulating business activities. As businesses expand to meet the increased demand, job opportunities are created, further bolstering economic growth and reducing unemployment rates.
Furthermore, to build a thriving economy, Nigeria needs to retain its best talent and attract skilled individuals from other countries. A new minimum wage that reflects the cost of living will make Nigeria a more attractive destination for skilled workers, fostering economic growth and development. There’s no gainsaying the fact that a competitive minimum wage is essential for retaining skilled workers. The current low minimum wage has led to a brain drain, with many skilled professionals seeking better opportunities abroad.
Never has the working public, estimated to be around 80 million, which amounts to nearly 73% of the total working age population, been more predisposed to the argument that government ought to intercede on behalf of those who are having trouble making ends meet. People’s buying power has been ravaged by inflation. Believe it or not, it has been 38 years since a Nigerian earned a real minimum wage before the introduction of the infamous Structural Adjustment Programme in 1986 which saw the injurious devaluation of the Naira. In 1981, the monthly minimum wage paid to a public servant in Nigeria was N125, which was equivalent to $195. Then, the Naira was fairly stronger than the US Dollar and the take home pay of the Nigerian worker was enough to cover his or her basic needs and necessities. But, by 1989, with the effect of SAP taking its toll in the country, the minimum wage stood at N250 which was equal to a paltry $31. Thus, the fortune of the Nigerian worker had nose-dived by 164 steps even though the volume had slightly increased. Ten years later in 1999, the minimum wage was jerked up to N3,000, however, the Naira had then massively depreciated in value as the worker’s paycheck comparatively gained only one dollar at $32. Following another increment in minimum wage in 2001, the Nigerian worker was paid between ₦5,500 and ₦7,500 (roughly between $49 and $67) which did not proportionately reflect the universal standard. In 2011, ₦18,000 (equivalent to $117) was made the minimum wage in the country before it was raised to ₦30,000 ($98) in 2018 with no any tangible and commiserate impact on the workers’ lives. Today, the ₦30,000 being paid as minimum wage (nearly $25) has drastically declined in value compared to last year’s rate of $65.
Interestingly, while the monthly minimum wage for Nigerian workforce remained at a meagre N30,000, the National Assembly budget has been bulging and swelling since 1999 from N2.2 billion to an astronomical ₦344.9 billion.
In the 2024 Budget, the estimated monthly entitlement for each Senator is ₦37.57 million, while a House of Representive member collects ₦18.2 million which is outrageous and morally improper.
I think the Nigerian worker deserves better. A monthly salary should be enough to pay for basic necessities. If the federal minimum wage had kept up with inflation since 1986, it would currently be $300 monthly, which is equivalent to around N450,000, even though I cannot fairly say that the average worker is twice as productive as his or her fellow worker in the early 1980s. Nevertheless, Nigerian workers merit a better package. The N450,000 minimum wage may sound very high but the value of our currency has collapsed and we ought to think of the bare minimum necessary to live decently in Nigeria.
Currently, the Naira, depreciated at 220% against the Dollar, is the world’s third worst performing currency against the Dollar, only ahead of Syrian pound (at 418%) and Argentinian peso (at 336%).
The highest minimum wages in Africa, on a monthly basis, range from $456 in Seychelles to $151 in Tunisia. Nigeria’s minimum wage is $30 and she is still the ‘Giant of Africa’. Among the top 10 countries with highest minimum wage are Morocco ($347), Mauritius ($320), Gabon ($245), South Africa ($231), Equatorial Guinea ($211), Libya ($206), Djibouti ($197) and Egypt ($194).
Of course, implementing a new (universal standard) minimum wage may pose certain challenges for the Nigerian economy. Some concerns include potential inflationary pressures, increased labor costs for employers, and the impact on small businesses. To address these challenges, it is crucial to undertake comprehensive economic analysis and engage in dialogue with all stakeholders, including employers, employees, and trade unions. Phased implementation, targeted subsidies, and tax incentives for businesses can be considered to mitigate the potential adverse effects.
By and large, a new minimum wage in Nigeria is essential in the face of the current high cost of living. However, careful consideration must be given to the potential challenges that may arise during the implementation process. By taking a balanced and inclusive approach, Nigeria can establish a fair and sustainable minimum wage system that benefits both workers and the economy as a whole.
