The Nigerian government has finally announced plans to raise the national minimum wage from N30,000 to N70,000, putting an end to the several months of haggling with organised labour.
This comes after a series of negotiations with the labour unions who had gone on a day strike, shut down the national power grid and busiest airports to drive home their demands.
Nigeria’s minimum wage has evolved invariably over the years. Before independence, the federal government did not support a national minimum wage.
It was not until 1981 that Nigeria enacted its first national minimum wage law under President Shehu Shagari, following the Nigeria Labour Congress’s agitations.
In 1981, Shagari established the national minimum wage at N125 per month for full-time workers, excluding seasonal and small businesses.
Adjusted for inflation, this amount equals roughly N265,000 today—more than eight times the current minimum wage of N30,000, SBM Intelligence said in its recent report.
Nigeria’s minimum wage has undergone several revisions since 1981.The first bump came after the N125 was revised to N250 per month in 1991. In 2000, the bar was raised to N5,500.
Then, in 2011, President Goodluck Jonathan ushered in a significant increase, pushing the minimum wage from N7,500 to N18,000.
Fast forward to 2019, and it was review time again. Labour unions aimed high, proposing N30,000 per month. The federal government countered with N24,000, while state governors suggested N20,000.
Negotiations faced challenges as the National Council of State initially agreed on N27,000, but governors later proposed N22,500.
The NLC insisted on N30,000, which eventually prevailed in the National Minimum Wage Act of 2019. And the law significantly increased the monthly wage from N18,000 to N30,000.
The current N30,000 minimum wage took effect with an exchange rate of 306.08/US$1, this amounted to US$98 at the period.
But at today’s exchange rate, it is less than US$20, indicating a rate below what was paid in 1991.
In 2024, the dispute over the minimum wage in Nigeria continues. Organised labour initially demanded a minimum wage of N615,000 ($405.19), then reduced their request to N497,000, and later to N250,000.
Meanwhile, state governors have publicly stated that they cannot afford to pay the then proposed N62,000 minimum wage as it would lead most states to bankruptcy.
They have urged the NLC to allow them to independently negotiate a minimum wage tailored to their states’ financial capacities.
However, the federal government proposed various amounts, including N48,000, N54,000, N57,000, N60,000 and N62,000 before settling on N70,000.
But even at N70,000 ($44), Nigeria’s minimum wage is still the lowest among top 10 African economies, a report by SBM Intelligence reveals.
While the new minimum wage is aimed to reduce the cost-of-living burden off Nigerians, there are growing concerns of the capability of states and organised private sector to pay and the implications it may have on employment and inflation.
