The Nigeria Employers Consultative Association (NECA) has raised alarms about the potential adverse effects of approving a minimum wage exceeding N62,000, warning that it could result in job losses.
Adewale-Smatt Oyerinde, NECA’s director-general, expressed these concerns during an interview with journalists on the sidelines of the Nigeria Employers Summit held in Abuja. The summit’s theme was “Economic Renaissance: Harnessing Government Reforms and Private Sector Agility.”
Oyerinde stated that the organized private sector cannot afford a minimum wage higher than N62,000, which was agreed upon during tripartite committee negotiations. He warned that any figure above this threshold could lead to significant job losses, set a precedent for non-compliance, and spark litigation.
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“Setting a national minimum wage that reduces people’s ability to pay will set the stage for litigation and crisis,” Oyerinde stated, highlighting the delicate balance needed to ensure compliance without crippling businesses.
Responding to allegations of delays in the minimum wage process, Oyerinde clarified that the process is ongoing and that misinformation about delays should be addressed. He noted that a bill would be sent to the National Assembly following the tripartite committee’s recommendations to the president.
“There is no waiting game, and I think we must put all this into context. It is misinformation,” he said.
Federal Executive Council’s Decision
On Tuesday, the Federal Executive Council (FEC) decided to step down the memorandum on the report of the Tripartite Committee on the New National Minimum Wage. Minister of Information and National Orientation, Mohammed Idris, explained that the decision was to allow for further consultations between President Bola Tinubu, state governors, local government authorities, and the private sector.
“The new national minimum wage is not just that of the Federal Government, it is an issue that involves the Federal Government, the state governments, local governments, and the organized private sector and of course, including the organized labour,” Idris stated.
Divergent Proposals and Reactions
The discussions about the new minimum wage have seen significant differences in proposed figures. The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have been advocating for a minimum wage of N250,000. In contrast, the Federal Government, states, and the Organized Private Sector (OPS) have countered with an offer of N62,000. State governors and local government chairmen have expressed concerns about the sustainability of even the N62,000 figure proposed by the federal government.
In response to the FEC’s decision to step down the memo, the NLC and TUC have called for an urgent meeting. The NLC President, Joe Ajaero, reiterated that the union would not accept the latest offer of N62,000 or the N100,000 proposal made by some individuals and economists.
A senior NLC official announced that the meeting is scheduled to take place at Labour House on Wednesday at 10:00 am. This meeting aims to help the unions strategize and respond to the federal government’s stance on the minimum wage issue.
The Backstory of the Minimum Wage Debate
The push for a new minimum wage has deep roots in Nigeria’s socio-economic landscape. The previous minimum wage, set at N30,000, expired at the end of April 2024. The expiration prompted immediate calls for a review and an increase, given the rising cost of living and inflationary pressures affecting Nigerian workers.
The situation reached a boiling point earlier this year when the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) organized a nationwide strike to protest the government’s delay in addressing the wage issue. The strike had significant economic repercussions, paralyzing many sectors, including transportation, education, and healthcare. Businesses suffered substantial losses, and the economy was estimated to have lost billions of naira during the period of industrial action.
Nigeria’s economic environment has been challenging, with soaring inflation, currency devaluation, and increased cost of living. These economic headwinds have fueled the demand for a living wage that can adequately support workers and their families. The call for a minimum wage of N250,000 by labor unions is seen as a reflection of the economic realities faced by many Nigerians.
Potential for Further Industrial Action
Given the government’s current approach and the deferment of decisions on the new minimum wage, there is growing concern that unions may resort to another round of nationwide strikes.
The unions have expressed frustration over the government’s perceived lack of urgency and commitment to addressing their demands. The Assistant General Secretary of the NLC, Chris Onyeka, indicated that the unions would not accept the proposed figures of N62,000 or N100,000, emphasizing the need for a substantial increase to meet the cost of living.