Wage negotiation: Job security should be prioritised – NECA DG

Adewale-Smatt Oyerinde, the director-general of the Nigeria Employers’ Consultative Association (NECA), has emphasised prioritising job creation and security in the ongoing negotiation for a new national minimum wage.

A tripartite committee involving the government, labour and the organised private sector is negotiating to arrive at a new minimum wage that would be acceptable to all parties. Nigeria’s current minimum wage is N30,000.

The organised labour represented by the Nigeria Labour Congress (NLC) and Trade Congress (TUC), entered the ongoing negotiation with N615,000 demand but subsequently cut it to N500,000. The Federal Government has equally raised its initial offer of N48,000 to N54,000, while the organised private sector is offering N57,000.

But speaking on the negotiating, Oyerinde urged the committee to prioritise job creation and job security given the worrisome and increasing rate of unemployment. The NECA boss said productivity should be a key driver of higher wages.

“It is important to note that what the committee was constituted to negotiate is a new national minimum wage. A minimum (not maximum) that could be termed the “floor” wage, below which no employer should pay. Employee should be able to navigate their paths toward higher wages through increased productivity and value addition,” he said.

While explaining the current realities of the organised private sector of Nigeria, the NECA DG noted that “In the last three years, hundreds of companies have either exited the country, shut down or changed business model. These companies included Jubilee Syringe Manufacturing (JSM), Proctor & Gamble, Unilever Nigeria Plc, PZ Nigeria Plc, GSK Nigeria Plc, Sanofi Pharmaceuticals, Bolt Food, Nampak, Microsoft, Jumia Food, Equinor (oil & gas), Mayor Biscuits Company Limited, Greif Nigeria among others, with many other Multinational companies declaring over N1trillion in combined losses. According to the Manufacturing Association of Nigeria (MAN), about 767 manufacturing companies were shut down and over 335 experienced distress in the country in the last 3 years. In addition to this is a bourgeoning N350 billion worth of unsold inventory of manufactured goods of which the same fate is faced by small and medium-scale industries (SMEs). The private sector is on the precipice of collapse with massive consequences for jobs,” said Oyerinde.

Urging the national minimum wage committee to refocus its effort on protecting jobs, boosting the capacity of the private sector to create more jobs and ensure sustainability and ability to pay, Adewale-Smatt stated: “According to the National Bureau of Statistics, the combined rate of unemployment and time-related underemployment as a share of the labour force population (LU2) increased to 17.3 percent in Q3 2023 from 15.5 percent in Q2 2023. In specific terms, the unemployment rate increased significantly in Q3 2023 at 5.0 percent. With these figures, more efforts should be concentrated on keeping more people in employment while the government continues to implement its planned interventions in transportation, food security and general macro-economic stability,” he said.