Nigeria must tackle cost of living to make wage reforms effective – NECA DG

Adewale-Smatt Oyerinde, Director-General of the Nigeria Employers’ Consultative Association (NECA) and a leading voice within the Organised Private Sector (OPS), speaks in this exclusive interview with BusinessDay’s Joshua Bassey on key business and labour issues. He offers employers’ perspectives on the rising cost of doing business and the complex landscape of industrial relations in Nigeria. Excerpts.

As workers mark May Day this week, how would you assess the state of labour-employer relations in Nigeria today, amid inflation, wage pressures and slowing business growth?

The state of labour employer relations today is under some strain, driven by a difficult economic environment and global uncertainties. Global analysis confirms that the business environment is not generally hospitable. While there are semblances of stability and progress in certain areas, there are contradictions in many others. The International Monetary Fund (IMF) recently revised Nigeria’s growth forecast for 2026 down to 4.1 percent, citing higher fuel and fertiliser prices and increased shipping costs, which weigh on non-oil activity. For employers, the cost of energy, logistics and regulatory issues remains a critical concern.

On the other side, workers are facing a sustained erosion of their purchasing power. While the N70,000 national minimum wage was implemented in some sectors, the Nigeria Union of Teachers (NUT) has publicly stated that several states are yet to fully implement it. Also, after a period of disinflation, prices are rising again. Inflation increased to 15.38 percent in March 2026, breaking an 11-month declining trend, and analysts project further increases for April. This combination of rising business costs and persistent wage pressures means the relationship will continue to experience fractures.

While we will continue to work and deepen our collaboration and partnership with organised labour, we hope that the social partners will take more interest in economic issues and join our advocacy in the same. The reality remains that if the business continues to struggle, it will impact its ability and capacity to meet the yearnings and expectations of the workforce. With social dialogue, we believe the strained areas will continue to be smoothened.

Employers have raised concerns over the rising cost of doing business. How can Nigeria balance workers’ demand for improved welfare with employers’ concerns about sustainability and competitiveness?

Balancing these legitimate but competing interests is the central challenge of our time. It requires pragmatism, not just demands. From the employer’s perspective, the most direct ways to create room for wage increases and improve welfare are to reduce the cost of production and increase productivity. Currently, energy costs are crippling, and interest rates are not smiling. With diesel at nearly N2,000 per litre, a significant portion of operating expenses goes to simply keeping the lights on and goods moving. Any discussion on wages must be accompanied by urgent government action to stabilise energy prices, reduce logistics costs and further improve the regulatory environment. We commend the Presidential Enabling Business Environment Council (PEBEC) for leading the charge on improving the ease of doing business in Nigeria.

Secondly, the government has a role to play in using fiscal policy to ease the burden. The new tax laws, which include provisions like the additional deduction for salary increases for low-income workers, are exactly the kind of targeted relief that can encourage employers to improve welfare without breaking their bottom line.

“With diesel at nearly N2,000 per litre, a significant portion of operating expenses goes to simply keeping the lights on and goods moving. Any discussion on wages must be accompanied by urgent government action to stabilise energy prices, reduce logistics costs and further improve the regulatory environment.”

Finally, we need to move towards productivity-linked pay models. It is not sustainable to demand wage increases without corresponding improvements in output and efficiency. A collaborative approach focused on reducing operating costs and improving productivity is one of the many paths to a sustainable balance.

Given NECA’s role in mediating industrial disputes, what lessons have recent engagements with the Nigeria Labour Congress and Trade Union Congress offered about preventing strikes before they escalate?

NECA’s role is to promote social dialogue and prevent disputes before they become crises. A key lesson from our recent engagements is that strengthening formal dispute resolution mechanisms is essential for prevention. This was a central theme at the 4th International Labour Adjudication and Arbitration Forum (I-LAAF), which NECA organised in Abuja on February 12, 2026.

At that forum, the minister of labour and employment, Mr Muhammad Dingyadi, gave the federal government’s full backing to NECA’s drive to strengthen the industrial courts and arbitration panels. He stated that accessible and efficient labour justice is critical for productivity, social stability, and confidence in the workplace and that strengthening these institutions would ensure fairness and promote industrial harmony across the country.

The lesson from this engagement is clear: When workers and employers believe there is a fast, fair, and professional system to resolve their grievances, they are far less likely to resort to strikes or lockouts. The forum also highlighted that the most effective labour justice system is one that prevents disputes before they escalate into litigation through clear human resource policies, sound collective bargaining processes, and sustained social dialogue. Delays and procedural bottlenecks in formal dispute resolution systems increase the cost of doing business and weaken confidence in institutions, which can lead to unrest. Therefore, our focus is on working with the government to ensure the National Industrial Court (NIC) and the Industrial Arbitration Panel (IAP) are well resourced and that alternative dispute resolution methods are embraced by all parties.

There is persistent debate over the adequacy of the N70,000 new minimum wage. From the employers’ perspective, what needs to happen to make wage reforms workable in both public and private sectors?

From our perspective, the key to making wage reforms workable is focusing on the core parameters that drive the cost of living across the country. These parameters as enunciated by the International Labour Organisation must not only be accepted, understood and agreed on; they must be the foundation of any reform or negotiation. There is also a need for us to understand, even if we don’t agree on the peculiarities of each geopolitical zone and business nature/model. The current debate is complicated by the fact that many states have not yet fully implemented the N70,000 minimum wage, as noted by the Nigeria Union of Teachers. This creates an uneven playing field and fuels further agitations.

For the private sector, we align with the fact that there must be a national minimum wage, below which no sub-national or business should pay. This will remain the barest minimum, based on an agreed parameter. The expectation is that the minimum will not be a burden on any state or business. We believe any future wage negotiation must include a phased timeline for implementation to enable all states and businesses to plan ahead for implementation. Also, wage increases must be tied to clear productivity benchmarks. A national minimum wage is a floor, not a ceiling. To make it workable, the government must also fulfil its role by stabilising the macroeconomy, bringing down inflation, and reducing the cost of energy, thereby protecting the real value of the wages that employers pay.

Amid automation, digitalisation and changing work models, what should Nigeria be doing now to protect jobs while preparing workers for the future of work?

Nigeria faces a significant transition as technology reshapes the world of work. The immediate risk is not mass unemployment from robots but a growing skills mismatch. Many current jobs will be automated, and new jobs will require digital literacy. To protect workers and prepare them, we need a massive, urgent investment in reskilling and upskilling. This is a shared responsibility. The Industrial Training Fund (ITF) levy needs to be supplemented by a more focused national strategy on digital skills for the existing workforce.

We also need to modernise our regulatory framework to cover new work models, particularly the gig economy. Millions of Nigerians work through digital platforms with little to no social protection. A modern labour law should provide a pathway for these workers to access health insurance and pensions without stifling the flexibility that makes gig work attractive.

You sit at the intersection of government, labour and private sector dialogue. Is Nigeria’s tripartite industrial relations framework working as it should, or does it require major reform?

The tripartite framework is fundamentally sound as a principle, but its implementation requires major reform. The current structure is struggling to keep pace with the realities of a 21st-century economy, particularly the dominance of the informal sector, which accounts for about 93 per cent of employment in Nigeria. The framework is largely designed for the formal sector, leaving the vast majority of workers outside its protections and dialogue mechanisms.

Furthermore, the speed of dispute resolution is a challenge. While the government supports strengthening industrial courts and arbitration panels, as noted at the 4th I-LAAF forum, we need to see this translate into faster, more binding resolutions. The framework also needs to be updated to formally recognise and incorporate representatives of the informal economy and the digital platform economy. Without these reforms, our tripartite discussions, while important, will only ever address a small fraction of Nigeria’s actual workforce.

Many young Nigerians are concerned about unemployment, underemployment and the quality of available jobs. What role should employers play in expanding decent work opportunities for the country’s growing labour force?

Employers have a critical role to play, but we cannot solve this problem alone. Our primary role is to create sustainable, productive enterprises that can hire, pay decent wages and keep those in employment employed. This means advocating for a better business environment. However, we can also be more intentional about our hiring and training practices. We need to move beyond the obsession with degrees and focus on skills. Employers should invest more in apprenticeship and internship programmes that provide young people with actual, marketable competencies.

We also have a role in promoting entrepreneurship. Not every young person will find a job in a large corporation. Employers can support youth-led enterprises through supply chain integration and mentorship programmes. Decent work means stable income, safety, and dignity. Employers can provide this by formalising employment relationships wherever possible and providing access to basic social protections like health insurance and pension contributions, even for entry-level staff.

The Tinubu administration says its reforms, particularly fuel subsidy removal and exchange rate liberalisation, are necessary for long-term stability, yet businesses face rising operating costs, weak consumer demand and factory closures. From the employers’ perspective, has the administration struck the right balance between reform and economic survival?

This is a complex question. The employer’s perspective is that the direction of the reforms is correct. The fuel subsidy was a fiscal drain, and a unified exchange rate is essential for long-term investment. However, the administration has not yet struck the right balance between these necessary reforms and the short-term survival of businesses and households. The shock has been delivered, but the buffers are insufficient, made worse by different global economic and social events that are beyond the government (Russia vs Ukraine, crisis in the Middle East, etc.). The cost of energy remains prohibitive, with diesel at nearly N2,000 per litre, which makes production in Nigeria uncompetitive.

We are seeing the effects of factory closures and weak consumer demand as inflation erodes purchasing power. While the Naira-for-Crude policy and the Dangote Refinery offer long-term hope, the transition period has been extremely painful.

To strike a better balance, the government needs to move with warp speed on innovative intervention measures for businesses, such as accelerating the CNG conversion programme and providing targeted relief on energy costs for manufacturers. We support the destination and align with the process, but we must do something to ease the pains of the journey. A further temporary bridge is needed to help the private sector survive until the long-term sustainable benefits of the reforms materialise.