The Sad Tales of Nigerian Minimum Wage

The Sad Tales of Nigerian Minimum Wage

By Samuel Nwite

The Nigerian labor market has been stricken with abject underpayment for years, which has done more than stripped workers of dignified means of livelihood. The 18.000 naira minimum wage has been nothing but a disguised ridicule that could barely cover the transportation bill of a single for a week muchless a family with miscellaneous needs. House rent, School fees, medical bills, utility bills, food etc. are all encamped around this token, ready to unleash their ferociousness at the end of every month. The hope of livable minimum wage has been coming every four years in discussions at the National Assembly. Each time, the discussion gives a false hope to the impoverished workers who hope for a better life through increased wages. Even when the issue goes beyond discussion, the action has been nothing but mockery to livelihood.

In 2004, the 5th Assembly passed the bill that set the minimum wage at N5, 500 per a month. With that, the National Assembly scored some credit worthy of applause if not for the fact that it’s a ridicule to the realities at the homes of Nigerian workers. Exchange was 130 naira to a dollar, and the cost of living in Nigeria was not in any way close to the minimum wage. So an average Nigerian worker was living below 60 cents per day, all thanks to Nigerian Labor Unions, they fought hard to make it happen.  Series of strikes by the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) forced the Obasanjo’s administration to bend so that a raise of 2500 naira was added to the derisory 3000 naira minimum wage that workers used to earn prior to 2004.

The choiceless workers accepted it in good fate. After all, 2500 naira could ease the burden of cooking gas, Nepa bill, and maybe water. The rest of the month will determine what will happen to the remaining 3000 naira.  However, one thing is sure, whatever will happen to the 3000, will need far more than that. It was on these appalling circumstances that workers waited for another time of minimum wage review. But until then, they survival depended on three things:

  1. Alternative means of income
  2. Borrowing
  3. Corruption: extorting everyone they owe services at work.

Option number 1 does not always come easy because of a lot of factors ranging from fund to enabling environment to strategy etc. And so does option number 2, you always run out of creditors before you know it. So survival rests on the number 3, corruption. The shocking practices of extortion you see in government offices today is deep-rooted in meager wages. And there are two set of Nigerians at the receiving end of the consequences of her poor minimum wage. Workers who take the pay home, and every other person who gets extorted by the workers. These two categories of people have one thing in common; the hope that things will change for good. The change everyone is expecting lies mainly on livable minimum wage that is not in government’s agenda for the nearest future. The industrial action that influenced the government to implement the 5, 500 naira wage was not going to happen again anytime soon. Even if it happens, the governments may not yield. But that doesn’t mean the people were not going to try anyway, it’s a quest for survival.

In 2008, the NLC made a public demand for upward review of the minimum wage to the late President Musa Yar’Adua. It was a long overdue demand following the incessant rise of cost of living, especially in the petroleum industry. The proposed deregulation of the downstream sector was a brunt that can’t be sustained on 5, 500 naira minimum wage.

The NLC, having consulted widely through an internal committee that it set up, set the minimum wage demand at 52, 200 naira. It was more like a continuation of the battle for the implementation of the previous agreement of 25% increment that Obasanjo’s administration only saw fit to effect 15%. Only that this time, a whole lot of factors have come into play, all emanating from the high rise of the cost of living. The 2000 Wage Review Agreement made provision for 25% wage increase that would take effect from May 1, 2001, and subsequently, further 15% increase that would be effected from May 1, 2002. It never happened.

Year Minimum wage
1981 N125
1990-1991 N250
1999-2000 N3,000
2004 State-N5, 500

Federal-N7,500

2011 N18,000
2019 N30, 000

 

The NLC knew they were dealing with an insincere government that will never stick to agreement. The government could only agree just to get the Labour Unions to call off the strike, and then after reneged on the agreement. So the 52, 200 naira wage demand seemed impossible but Labour Union was not going to give up easily, not without a fight. The 20.9% increase in the cost of household items, especially food was not a situation to be waved away because the government is insouciant. Especially when the salaries of political office holders has been increased by 800% just between 2006 and 2007. To justify the compulsion of the 52, 200 naira minimum wage demand, the NLC published a sample of Estimated Monthly Cost of Living in Nigeria.

Accommodation N6, 000.00
Electricity N1, 000.00
Kerosene N4, 000.00
Water N500.00
Communication N2, 000. 00
Food N20, 000.00
Clothing N4, 000. 00
Medical N5, 000. 00
Education N6, 000. 00
Washers, soaps, detergents N1,300. 00
Entertainment, Recreation N1, 000. 00
Miscellaneous N1, 500. 00
Total N58, 500. 00

 

It was based on this calculation that NLC made the N52, 200 demand. In response, the government set up a tripartite committee to urgently negotiate with labour, as there has been a looming warning strike billed to go full scale if the government seems adamant. So negotiation commenced between Organized Labour and the 24 man government committee with high sense of urgency that lasted for about two and half years. In the end, the committee agreed that there should be a review of the 2000 minimum wage agreement, and thus, submitted a draft bill on the new national minimum wage.

As usual, the implementation started to linger. On October 27, 2010, the NLC issued a 14 day ultimatum to the government for the implementation of the proposed new wage. It was then that the government took the first action by setting up another committee for the ratification of the technicalities. There was a three week time frame for the committee, which did not go down well with NLC. So the strike commenced, but lasted for only one day before it yielded to government’s negotiation. The National Council of States (NCS) met on that day and approved the minimum wage. But not the proposed 52, 200 naira, it was 18, 000 naira.

The giant leap from the previous amount would have been a great news to Nigerian workers, if not that it took six years of skyrocketing cost of living that is still going higher. Nine years after, the pay slip of Nigerian workers didn’t change figures. So in May 2018, Organized Labour was on the table once again talking 25 and 30% increase in minimum wage, with 56,000 naira as a benchmark. As expected, the Federal Government was on the defensive, it could only agree to 10, 000 naira for senior workers and 12, 000 naira increment for junior workers. So on these figures, a deal was sealed. The bill was sent to the National Assembly, and the 2010, minimum wage agreement was repealed in March 2019. Political office holders who have since 2010, increased their wages in voluminous quantum were hailing the move, saying it’s going to put smile on the faces of Nigerian workers by lifting their standard of living. It certainly appears so, if not that the realities are indicating once again the opposite.

With exchange at 360 naira per a dollar, the 30, 000 naira minimum wage only elevated the standard of living of Nigerian workers to 2.7 dollars per day. The World Bank defines moderate poverty as living under $3.10 a day. So the minimum wage cannot even keep up with moderate poverty, it’s a case of, “bad excuse is better than none,” and many homes are at the receiving end of it. To make matters worse, the implementation of the new minimum wage is not guaranteed. The state Governors have resisted the bill, and now that it has become law, the chances of many states’ implementation of it are minimal. So the workers will continue to survive doing what they always do – corruption.

“Corruption cannot be eradicated by ‘do not steal’ laws only, but through livable provisions that give people dignifying choices to stealing.”

This is a fact that the government needs to realize, that it’s losing much more through the corruption enabled by poor minimum wages, as it is fueled by the natural instinct of survival. And as it is today, the sad tales of minimum wage in Nigeria will continue to be told, and corruption will continue to occupy more pages.

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3 thoughts on “The Sad Tales of Nigerian Minimum Wage

  1. The issue of linking poor wage and corruption is debatable, a very complex one anyway. The fellas in Immigration offices, does their own extortion which has been institutionalised also a problem of poor wage? Once we muddle these things up, we can never have a sound debate on what leads to moral decadence and value erosion.

    I believe the argument about appropriate wage is already skewed once we look at what the political office holders earn, so it doesn’t allow the citizens to critically examine the true financial health of Nigerian state; and we keep living with the assumptions that there is money, government simply doesn’t want to pay!

    We have bastardised the Naira, so every raise in wage usually becomes useless within a short time, with the ensuing inflation upending the remaining little respite brought by the wage increase. It’s a vicious cycle, but in our classic self-delusion, we always push for things that don’t solve real problems.

    Currently our debt servicing is hovering around $2B quarterly, and we are poised to borrow more, with some of the borrowing ending up being used for payment of salaries. If we are not careful, we could wake up one day only to hear that Nigerians have been sold their country’s creditors.

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  2. I agree, the naira is bastardized. In other words, our economy is very bad… And you can’t have a better economy as a country with an underpaid workforce.

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