Workers take-home pay should be raised

Amid rising inflation and increased living costs, the Nigeria Labour Congress (NLC) has been agitating for a significant wage raise to reflect the prevailing economic realities. In apparent response to the workers’ persistent demand, the Nigeria Governors’ Forum (NGF) has proposed N100,000. But the NLC has dismissed the offer as insignificant. “We consider it thoughtful of the Kwara State Governor (and NGF Chairman, AbdulRahman Abdulrazak) to propose this,” said Labour spokesman Benson Upah, “but certainly, N100,000 falls far below the realistic figure.” Instead, the NLC is asking for a N1 million monthly minimum wage that has also triggered divergent views.

In July 2024, the federal government approved a new national minimum wage of N70,000 after prolonged negotiations with organised labour. But the call for another wage review intensified almost immediately amid worsening economic conditions. The removal of fuel subsidies and the floating of the naira led to significant depreciation of the national currency leading to skyrocketing transportation costs and food prices, and precipitating a sharp erosion of real wages. The economic hardship is further worsened by increases in electricity tariffs and the impact of recent tax measures. Another ground often advanced to support review of wages is that the Nigerian workforce is comparatively in the category of the least paid in Africa. So pitiable is the take home salary of a Nigerian worker that it pales in comparison to what workers in Ghana, Kenya, South Africa and Angola earn in the salary equation.

However, while many acknowledge that workers deserve better welfare as a result of soaring inflation, they are also acutely aware that excessive increases would only worsen inflationary pressures and further erode purchasing power of the people. Improving workers’ welfare requires broader economic reforms aimed at reducing inflation, improving productivity and enhancing the business environment. The chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said while wage adjustments are necessary and often justified, “but in an economy characterised by persistent inflationary pressures, structural bottlenecks and weak public service delivery, nominal wage increases are frequently eroded within a short period.”

The organised private sector has indeed cautioned that drastically raising wages could result in further price hikes. Beyond wage negotiation, many stakeholders are urging government, labour unions and policymakers to also address issues of insecurity, unstable power supply and foreign exchange challenges, which are all drivers of economic hardship among workers. Besides, a minimum wage is the lowest amount of salary that employers of labour, whether in the private or public sector, can legally pay their employees, so it is not only about government. Many small-scale businesses will collapse under the weight of any unrealistic minimum wage. Indeed, many are not paying the present minimum wage to their workers. Even several state governments are yet to brace up to paying the current minimum wage of N70,000, given their meagre internally generated revenue (IGR) or outlandish lifestyles. Few states like Imo and Lagos are paying a little above the present wage, but many others are yet to fully implement other key provisions, including consequential adjustments for senior workers, and extension of coverage to local government staff, primary school teachers, and health workers. Only last month the NLC directed workers in states yet to fully implement the 2024 national minimum wage to hold protests on May Day, 2026.

We are however delighted that the NGF is seriously considering the issue of raising the minimum wage. And as standard practice, they must consult with the organised private sector and organised labour to reach a consensus. The living conditions of many Nigerians should be upscaled by paying wages that will entitle them to a decent life. Government must make deliberate efforts to tackle the increasing challenge of poverty.