Why Nigeria’s N70,000 New Minimum Wage Failed To Address Inflation Realities—Osifo

The President of the Trade Union Congress (TUC), Festus Osifo, has revealed that the approved N70,000 minimum wage for 2024 represents a 90 per cent adjustment to account for inflation since the previous N30,000 minimum wage was approved in 2019.

Osifo noted that organised labour negotiated the new wage using inflation figures released by the National Bureau of Statistics (NBS).

In July 2024, President Bola Tinubu signed the N70,000 national minimum wage into law, three months after the N30,000 minimum wage ceased to be law.

The new law mandates a three-year review period and establishes a minimum monthly salary of N70,000 for workers across Nigeria, reflecting a 133 per cent increase from the previous amount.

Currently, 30 states, including Rivers, Bayelsa, Niger, Akwa Ibom, Ogun, Kebbi, Kogi, Kaduna, Gombe, Ekiti, Lagos, Edo, Adamawa, Yobe, Enugu, Oyo, Delta, Ondo, Osun, Benue, Kano, Abia, Kwara, Jigawa, Katsina, Ebonyi, Borno, Taraba, and the FCT, have approved the N70,000 minimum wage or higher.

THE WHISTLER reports that states such as Lagos, Edo, Adamawa, and Yobe have already begun implementing the new wage.

Speaking exclusively to THE WHISTLER, Osifo explained that, despite the controversy surrounding the agreed N70,000 minimum wage, organised labour had negotiated based on a cumulative 77 per cent inflation rate over the past four years, starting from 2019 when the N30,000 minimum wage was approved.

According to him, the NBS inflation reports from 2019 to April 2024 served as the basis for negotiations among organised labour, the Organised Private Sector, and the government.

He said, “So like the analysis we’ve done, there are underlying principles that govern minimum wage conversation, and that underlying principle is inflation.

“We analyzed when the last minimum wage was approved in 2019, what was the inflation?

“So, if you calculate that inflation in 2019 and compound it with the inflation of 2020, 2021, 2022, and 2023, you will see that the inflation over these years is about 77 per cent.

“When you compound, the 77 per cent, will give you about N75,000.

“Now using the inflation of N75,000, that should be the minimum wage. But we achieved N70,000, and that gave about 90 per cent performance.”

Detailing further, he said, “The desirability would have been N75,000 because if you calculate inflation from when the last minimum wage was approved to today, what that means is that you take the inflation of 2020, apply it on N30,000, take the inflation of 2021, and continue applying it.

“What you are going to have by April 2024 would have been N75,000. So that means if we had achieved N75,000, we would have achieved 100 per cent coverage for inflation.”

Speaking further, Osifo stated that, despite achieving N70,000 instead of the desired N75,000, the figure does not fully reflect the challenges faced by vulnerable members of society.

He said, “Realistically, the figure released by NBS was far from the travails of Nigerians.”

However, he criticized the negotiation process, noting that organised labour could not produce authoritative figures other than those provided by the statistics bureau.

Speaking on the purchasing realities of Nigerians, the TUC boss said, “But the real question is this: the inflation that they dish out from the National Bureau of Statistics (NBS), does it reflect what we see on the street? So, when you check what was the price of rice last year and what is the price of rice today, you can see that it’s moved by close to 100 per cent.

“When you check what was the price of tomatoes last year and what was the price of beans previous year, when you do that on your own in your little corner, you are going to realize that even this inflation that they call 33 per cent doesn’t reflect what Nigerians are facing.

“But when you go to the table to have conversations on minimum wage, the official data that they are going to bring is the inflation figure from NBS, not what you perceive in the streets.

“So, if you use the official figure from NBS, as of when we were negotiating minimum wage, it could have been N75,000, and that would have given us 100 per cent performance.

“But realistically, what we are facing in the market, what we see on the streets, does not reflect the inflation level as reported by NBS.

“So. I would say, invariably, that while on paper we achieved 90 per cent of inflation when you compare from 2019 to date, realistically, what is there on the street is much more severe than the inflation that we felt we had addressed.”

Speaking on modalities to assist workers in the country, Osifo hinted at plans to review the three-year minimum wage adjustment on an annual basis.

Why Nigeria’s N70,000 New Minimum Wage Failed To Address Inflation Realities—Osifo is first published on The Whistler Newspaper