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The 2024 Minimum Wage Review Exercise in Nigeria: Critical Issues to Note

Rex Oforitse ARUOFOR, Ph.D and Daniel Risiagbon OGBEIDE, Ph.D

Abstract

The price deregulation policy embarked upon by the President Bola Tinubu’s administration since coming into power on May 29, 2023, has attracted mixed reactions. Consumer prices have continued to soar unabated and many people have complained of immense hardship. This situation may have informed why the Nigerian Labour demanded that the Government of Nigeria should as a matter of urgency implement the upward adjustment of the minimum wage of Nigerian workers. As a result of an intense negotiation between government and workers, represented by Nigeria Labour Congress and Trade Union Congress, the new minimum wage has been fixed at Seventy thousand Naira (N70,000.00) only. It is regrettable that we do not have a reliable time series on minimum wage in Nigeria but it is possible to tie the minimum wage to the average wage for which time series exist. This article is to objectively analyze this decision by letting each of the parties (or stakeholders) know and have complete knowledge of the impact and implications on the Nigerian economy. Thus, using the total differential systems modeling approach (ecostatometrics), the initial respective demands are analyzed for their impacts and consequences on the rest of the economy. There is need for all parties to tread carefully. However, wage increase is a necessary evil because only a fraction of the populace will be directly affected. Also, there is need for political office holders to make some concessions by cutting down their salaries and allowances.

Keywords

Price Deregulation PolicyConsumer PricesMinimum WageNegotiation and Total

References

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