In a landmark decision, the Nigerian National Assembly has adopted a bill increasing the national minimum wage to ₦70,000, from the previous ₦30,000 that has held since 2019. That adjustment is a big leap toward helping cushion economic challenges for employees across the nation.
Backstory and Key Information update
The journey to this new minimum wage has not been easy and has been characterized by long negotiations between the federal government under President Bola Tinubu and organized labor unions like the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). Finally, agreement was reached in a meeting held at Aso Presidential Villa in Abuja on July 18, 2024 .
President Tinubu further emphasized that the new wage was in continuation of his administration’s relentless efforts to find ways of improving the welfare of Nigerian workers. The new wage will be reviewed every three years to ensure it remains in tandem with emerging economic realities .
A mixed reaction was given by labor leaders over the new wage, acknowledging it as a positive move but at the same time highlighting the hard economic situation. “We are taking this with mixed feelings because of the situation of the economy,” said the TUC President while commending the President’s promise to meet other issues concerning labor, including those from the Senior Staff Association of Nigerian Universities (SSANU) and the Non-Academic Staff Union of Universities (NASU) .
Challenges and Reactions
The Organized Private Sector of Nigeria (OPSN) expressed concern regarding the practicability of the new wage, as they said production costs have been high and businesses will bear an economic burden. He said the federal government should support businesses with some form of fiscal incentives to ensure that it can meet wage obligations. He then suggested that such measures may range from the reversal of the recent increase in electricity tariffs, to subsiding essential inputs required in the process of production .
Despite these concerns, the passage of the bill has been seen as a victory for labor unions, who had agitated for a significant increase that takes into consideration the rising cost of living. While another school of thought believes that N70,000 minimum wage is the least the government could pay, hence the valid argument of able to meet the basic needs, the Peoples Democratic Party (PDP) lashed out at the new wage, saying ₦70,000 can barely meet the basic needs of Nigerian workers .
What You Should Know
- Effective Date: The ₦70,000 new minimum wage shall be effective when the President gives assent and it is gazetted thereafter.
- Review Period: The wage will be reviewed every three years with respect to inflation and other economic factors.
- Economic Impact: In any case, discussions continue taking into account possible economic impacts of the new wage, particularly on small and medium-sized enterprises.
- Labor’s Stand: While the increment is welcome, the labor unions are now gearing for further negotiations in order to make sure that supportive measures for the workers and businesses are actually put in place.
- Government Commitments: The government has committed to offering certain economic support that might reduce the cost burden on businesses, from possible tax reliefs and subsidies.
This ruling is a critical development in the landscape of labor in Nigeria, reflecting government initiatives to enhance living standards despite apparent economic challenges. It will be very important to monitor the implementation of the new wage law and its impact on the wider economy.