By Eberechi Obinagwam
Afrinvest (West Africa) Limited, a wealth advisory firm, in it’s new report titled: The Cost of Nigeria’s Spiraling Inflation Rate on the Average Households, revealed that Nigeria’s rising inflation rate has led to a 41% erosion of the N30,000 monthly minimum wage since 2019.
According to the report, the country’s macroeconomic fundamentals have been under significant pressure for over two years, and the inflation rate has adversely affected the purchasing power of the average household, resulting in a significant increase in the share of real disposable income allocated to final consumption expenditure.
It highlighted that the purchasing power of households with fixed earnings, such as those earning the minimum wage of N30,000, has decreased by more than 40% since 2019 due to the inflation scourge, noting that the average inflation rate reading has worsened to 18.8% in 2022, due to additional pressure from the global supply chain stoked by the war in Eastern Europe.
Similarly, the consumer price index (CPI) which measures the rate of change in prices of goods and services in its latest report released by the National Bureau of Statistics (NBS) reveals that Nigeria’s inflation rate rises to 22.04 percent in March 2023, up from 21.91 percent in the previous month.
All of this analysis shows that Nigeria’s minimum wage of N30,000 cannot meet the needs of average Nigerians, especially workers or those in the fixed income bracket, yet, some states have not implemented the N30,000 minimum wage with reasons that they cannot afford to pay it.
An August 2022 report from the Nigeria Union of Teachers (NUT) shows that only 15 out of Nigeria’s 36 states governments are paying the national minimum wage enacted by the National Assembly and signed into law by president Muhammadu Buhari in 2019.
According to media reports, teachers in primary and secondary schools in 21 states of the federation are still earning below N30,000 following the refusal of state governments to implement the national minimum wage.
The states said to have fully implemented the wage for basic school teachers are Oyo, Lagos, Akwa Ibom, Ebonyi, Edo, Ekiti, Jigawa, Kano, Katsina, Kwara, Ogun, Ondo, Osun, Plateau, Rivers and the Federal Capital Territory (FCT).
A report published by Tribune Newspaper revealed that some states reverted to the N18,000 minimum wage and spurned efforts to get them to pay teachers the N30,000 minimum wage.
This worrisome situation led Chairman Trade Union of Nigeria, Lagos council, Gbenga Ekundayo, to urge the Federal government to scrap those states that have refused to pay the minimum wage to its workers. According to him, if a state can not pay its workers the national minimum wage of N30,000, then the state is not worthy of being called a state.
Ekundayo while speaking at a one day pre May Day symposium with Nigeria Labour Congress (NLC) in Lagos said: “We need to get to a stage in Nigeria where we amend our constitution. A constitution that when a state is not viable, you give that state the opportunity to merge with the next state. They can’t continue to say that they can’t pay the minimum wage. Are they stopping their salaries and allowances as governors or even the fat retirement benefits? No, the federal government has not , but it’s the common man that they can’t pay N30,000. It’s totally unacceptable.”
Aggrieved, he added: “A time is coming when we will rise up against it. We got a letter from TUC headquarters to collate those states that have refused to pay the minimum wage as agreed in 2019. At the end of that meeting, I am expecting that the NLC and TUC will team together to deal with those states. It has to stop. They can’t be going out with entourage, living fat and it’s the workers they can’t pay, it’s totally unacceptable.”
Continuing, he said, “It’s unfortunate that government has never been fair to Nigerian workers. Because you find workers struggling to survive with the little that is being paid even when there is an increase in salaries there is always an inflation eating it, with so many necessities like transportation, security and portable water are not available. Even as a citizens, you have to provide those things for yourself.
“Before we even see our salaries, taxes has been deducted and whatever that you are left with, you have to struggle to make earns meet with it. Things that are forgotten in other parts of the world are things you have to grapple with. So, historically, government has not been fair to workers. That’s why we will continue to engage to see how we can improve our lots and to see how the social environment can change in order to favour the common man even as we call on government to look at those peculiar issues that concerns our life as common men.”
ILO’s latest report on global wages, disclosed, well-designed policy measures are needed urgently to prevent the deepening of existing levels of poverty, inequality and social unrest. Also help maintain the purchasing power and living standards of wage workers and their families.
The report stated that rising inflation has a greater cost-of-living impact on lower-income earners. This is because they spend most of their disposable income on essential goods and services, which generally experience greater price increases than non-essential items.
In this regards, former General Secretary, National Union of Postal and Telecommunications Employment (NUPTE), Comrade Onakpo Chris called on labour leaders to put certain things in the document that ensures that when the economic indexes in Nigeria change adversely, salaries of workers automatically should change even without negotiation.
For example, he said, in 2019 minimum wage, dollar was about N399. Today dollar to naira exchange is about N700, ”of what use is that minimum wage, it has been rubbished,” he queried.
He lamented that the injustice in the Nigerian work environment is terrible, better imagined than heard.
He said, ”Daily, the current economic challenges and indexes is breeding and promoting social economic injustice in the system. For example, a worker in 1981, is far and more better off than a worker today if you use the dollar level to rate it. And why should we use the dollar level to rate it? Because that’s what affects everything. If the dollar increases, they tell you that they want to remove subsidy on petrol, food stuffs in the market are increasing.
“The salary of a worker is not sufficient enough. Even if you say you want to go to the market to buy food stuffs, you will use your one month salary to buy food stuffs that will not be enough for you and your two children so, it’s not enough to just sit down and agree to an amount of money,” he said.
He urged workers representatives to look out for those things that are dealing with the money received as salaries, like transportation, security etc when next they go for negotiation.
“Some of us had free education in our primary and secondary education so whatever our parents were earning was sufficient enough to take care of the home but, today you know how much is it to train a child in school, you know what it is to take transportation.”
He also has a word for those in the private sector. “Every of your conditional service must have a re-opener clause where when things changes, we open a negotiation for workers so that workers will not be impoverished because it’s this imporverishness of workers that has led to social economic injustice in the system.”
He advised workers representatives to be equipped, start having pure economic trainings so they can stand tall while going for a negotiations. According to him, the people they are going to discuss with are people who have had trainings in harvard etc, “So, it’s important to be equipped so we can go into negotiation without checking out.”
National secretary, National Union of Air Transport Employees, Comrade Ocheme Aba, said, in all future negotiations, the union has to take into account the cost arising from inflation and exchange rate and build in mechanisms in those negotiations that will account for this on a daily basis.
“If you go through all the minimum wage negotiations over time and compare it with inflation and exchange rate, workers 20 years ago were earning far better despite the fact that salaries have been increased four, five times because of the exchange rate and inflation,” he said.
Earlier, in February, newly elected national president of the Nigeria Labour Congress, Joe Ajaero, while delivering his inauguration address after he was sworn in as President of the NLC in Abuja said the Congress will pursue a new national minimum wage with urgency.
He said the new minimum wage law would take into consideration the objective realities of socio-economy, expand its reach to capture more workers and create variables and thresholds for automatic adjustment of the nation’s wage floor to avoid unnecessary politicking, impunity by employers and reduce the suffering of Nigerian workers.
Data published yearly by the National Bureau of Statistics, reports that minimum wages in Nigeria remain unchanged at N30,000 Naira in a month, which is (65.148 USD/Month) in 2023.
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Measures to put in place for workers to stay balance amid inflation
