Victor EzejaFormer Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu, has recommended a minimum wage of between N75,000 and N100,000 for Nigerian workers.
Moghalu said Nigeria’s economy is not productive enough to support a minimum wage of N400,000 or N500,000 per month proposed by organised labour.
Join our WhatsApp ChannelHe said there is no doubt that Nigeria can’t afford to pay between N400,000 and N500,000 if the economy is truly productive.
In a post on his X handle, Moghalu said: “In the debates on national wage in Nigeria we miss the fundamental point: there is little or no productivity in the economy.
“If we had a truly productive economy there is no reason we can’t have the kind of minimum wage of 400 or 500K that Labour wants. But we can’t, because the level of productivity in the economy cannot support it.”
When the minimum wage debate started, labour unions had first proposed N615,000 and later came down to N494,000. The Federal Government on its part had offered to pay N48,000 which labour rejected and subsequently embarked on nationwide strike on Monday, June 2, 2024, which grounded socioeconomic activities across the country. At a meeting of the Tripartite Committee on Minimum Wage on Monday evening the Federal Government committed to a minimum wage above N60,000, while negotiations continue for both parties to arrive at a definite amount. Labour on Tuesday, announced temporary suspension of the industrial action pending the outcome of negotiations in the coming days.
READ ALSO: Minimum Wage Increase: Prepare To Deal with Inflation, Economist Tells FG
The former CBN deputy governor advised that while negotiations continue, both parties should arrive at a minimum wage that will not cause further spike to the already “ravaging inflation.”
“Remember, minimum wage is not just about government salaries. There are not more than two, at most three million civil servants in Nigeria. It is even more about what is paid in the private sector, to household staff, etc.
“All of this is why, all things considered, including avoiding a minimum wage that multiplies already ravaging inflation (assuming such a wage can even be paid), I recommend a minimum wage of between N75,000 and N100,000.”
He noted that while many Nigerians are upset that the political leaders are insensitive to the plight of the masses, and appropriate huge sums as wages for themselves, hence the agitation for minimum wage increase, “the economics of it all is far more complex.”
“Sadly, it is quite obvious that the political will to reduce the waste in governance does not exist,” Moghalu noted.
When asked by an X user about what can be done to make the economy become more productive, the economic expert highlighted the need for acquisition of skills in the areas that create value addition and also having a stable electricity supply which powers production.
He further observed that if the economy is productive, “wages go up naturally.”
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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