Nigeria’s minimum wage debate is facing renewed scrutiny as rising living costs, widespread informal employment and growing poverty raise questions about whether the national wage policy adequately protects workers.
With labour unions insisting that the N70,000 minimum wage falls far below a living wage, fresh data from the Central Bank of Nigeria (CBN) show that households earning below N70,000 have the highest perception of inflation, at 68.4 per cent.
Although Nigeria’s inflation rate has fallen to 15.4 per cent, less than half its peak in 2024, the CBN said low-income households still consider prices excessively high. Respondents identified energy costs, insecurity, interest rates and exchange rates as major drivers of inflation.
The concerns come amid rising fuel prices, with the Federal Government reportedly adjusting the pump price ceiling to N1,350 per litre last week. This represents an increase of about 570 per cent above the pre-subsidy removal price.
Three years after President Bola Tinubu removed petrol subsidies, millions of Nigerians are still struggling with high food prices, transport costs, utility bills and declining purchasing power.
Informal Employment Raises Questions About Minimum Wage Policy
The scale of informal employment has further complicated efforts to protect workers through national wage-setting policies.
A report by the Nigerian Economic Summit Group (NESG) puts the proportion of workers engaged in the unregulated informal sector at 92 per cent, leaving just eight per cent in the formal private and public sectors combined.
The figures raise concerns about the reach of minimum wage protections, particularly for workers outside formal employment arrangements.
The Federal Government had promised social safety programmes and a compressed natural gas (CNG) initiative to cushion the effects of subsidy removal. However, critics say the benefits have yet to translate into meaningful relief for most households.
The government reportedly saved at least N15.8 trillion through the direct cessation of fuel subsidy payments and channelled a cumulative N60.75 trillion through the Federation Account Allocation Committee (FAAC).
It also said more than N9 trillion, representing about 180 per cent of its share of the proceeds, went towards financing wage adjustments for approximately 1.2 million federal workers.
However, questions persist over the distribution of the gains and the effectiveness of social intervention programmes intended to support vulnerable Nigerians.
NLC Demands Higher Wages, Rejects Reliance on Palliatives
The Nigeria Labour Congress (NLC) has rejected the Federal Government’s social intervention programmes as a sustainable solution to the hardship caused by subsidy removal and other economic reforms.
The union urged the government to prioritise higher wages and policies that enable Nigerians to earn sustainable incomes.
The NLC’s Assistant General Secretary, Chris Onyeka, argued that distributing palliatives would not address the structural causes of poverty.
He said putting more money in workers’ hands would have a wider multiplier effect because wage earners spend much of their income on locally produced goods and services.
According to Onyeka, stronger purchasing power would increase demand for locally manufactured products, encourage manufacturers to expand production and create more jobs.
He also questioned the transparency and effectiveness of the mechanisms used to identify beneficiaries and distribute social intervention funds.
Onyeka called for greater transparency in the social register, urging the government to involve workers’ representatives and civil society organisations in its compilation to ensure that genuinely vulnerable Nigerians are included.
He further recommended reducing fees and levies imposed on market traders and commercial transport operators by state and local authorities.
The labour leader also blamed poor federal road infrastructure and insecurity for increasing the cost of doing business and moving goods and people.
He urged the government to focus on policies that restore purchasing power, create jobs, improve infrastructure, strengthen security and make economic activities more productive.
Expert Demands Accountability for N15.8tn Subsidy Savings
Executive Director of OJA Development Consult, Jide Ojo, challenged the Federal Government to provide Nigerians with a verifiable account of the reported N15.8 trillion saved through fuel subsidy removal.
Ojo said the government should demonstrate how the savings had improved citizens’ lives rather than continue presenting the figures as an economic achievement without clear evidence of their impact.
He stressed that demanding accountability did not amount to calling for the return of fuel subsidy, warning that reversing the policy could worsen the country’s fiscal challenges.
Ojo also demanded evidence of the reported N600 billion expenditure on social investment programmes, asking the government to provide data showing how many Nigerians had benefited.
He criticised the CNG initiative, arguing that inadequate refuelling infrastructure and high vehicle conversion costs had limited its potential.
According to him, access to CNG refuelling stations remains limited in Abuja, while converting a private vehicle to run on CNG can cost about N1.5 million.
He urged the government to expand refuelling infrastructure and address conversion costs to make the initiative more accessible.
Economist Questions Timing of Transport Interventions
Founder of the Pax Empathica Global Institute for Policy, Leadership and Governance, Lekan Olayiwola, criticised the government’s renewed push to reduce transportation costs, describing it as a politically motivated attempt to win public support ahead of the 2027 general elections.
Olayiwola argued that removing fuel subsidy amid existing economic turbulence worsened the cost-of-living crisis, as higher fuel prices fed directly into transport fares, food prices and other household expenses.
He said the absence of adequate social infrastructure, particularly an efficient public transportation system, had compounded the impact of subsidy removal.
He also questioned the effectiveness of the CNG initiative, citing the limited number of converted vehicles and the high cost of conversion.
Olayiwola urged the government to prioritise permanent social infrastructure and policies that directly reduce household expenses instead of relying on temporary interventions.
He further criticised the timing of the naira flotation, which he said was introduced when the economy was already experiencing severe inflationary pressure.
However, he acknowledged that the reforms had substantially altered the government’s fiscal position, strengthened foreign reserves and contributed to a more stable economic framework.
He cautioned that cheaper CNG would not automatically translate into lower transport fares because fuel was only one component of vehicle operating costs.
States, Local Governments Urged to Deploy Higher Revenues
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, urged state and local governments to use their increased revenues to ease the cost-of-living crisis.
Yusuf said the Federal Government deserved credit for achieving greater macroeconomic stability, particularly in the foreign exchange market. However, he argued that subnational governments now had a greater responsibility to translate increased public revenues into tangible benefits for citizens.
According to him, foreign exchange reforms and subsidy removal imposed significant costs on Nigerians through higher prices, while the resulting revenue gains increasingly accrued to states and local governments through higher FAAC allocations.
He described subnational governments as the biggest beneficiaries of the enlarged fiscal pool in revenue terms, arguing that their spending decisions deserved closer scrutiny.
Yusuf maintained that state governments should prioritise measures that directly reduce the financial burden on households and businesses.
He also argued that state and local governments were better positioned to deliver interventions at the grassroots because of their proximity to communities and the substantial resources available to them.
Minimum Wage Debate Highlights Wider Economic Challenges
The minimum wage debate has exposed a wider challenge facing Nigeria’s economic reforms: translating improved fiscal indicators into better living conditions for ordinary citizens.
While the government has recorded changes in revenue flows and macroeconomic conditions, workers continue to grapple with rising household expenses and declining real incomes.
The effectiveness of minimum wage protections is also limited by the large informal workforce, where many workers fall outside conventional employment arrangements.
As negotiations over a future minimum wage review approach, labour leaders and economic experts are calling for stronger wages, transparent public spending, improved infrastructure and sustainable measures to reduce living costs.
The central question remains whether Nigeria’s economic gains can be translated into meaningful improvements in workers’ purchasing power and the welfare of vulnerable households.
