Menu Close

Labour’s demand unrealistic, Nigeria’s productivity level can’t support N494,000 Minimum Wage ─Ex-CBN Dep. Governor, Senate, Others

Prof. Kingsley Moghalu, Ex-Deputy Governor of CBN

*Dr. Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, recommends a Minimum Wage of between N75,000 and N100,000 asserting the country’s current level of productivity in economy cannot support the Organised Labour’s demand for N494,000

Alexander Davis | ConsumerConnect

As the Federal Government’s Tripartite Committee on the new Minimum Wage continues negotiations on the burning issue in the economy, Dr. Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria (CBN), has declared that the country’s level of productivity in the economy cannot support the N494,000 Minimum Wage the Organised Labour.

The trade unions – the Nigeria Labour Congress NLC) and Trade Union Congress (TUC) Tuesday, June 4, 2024, had suspended their industrial action over the new Minimum Wage.

Commenting on the agitation for the N494,000 Minimum Wage the Labour is pressing for, Dr. Moghalu in a post on X, rather recommended a wage of between N75,000 and N100,000 Minimum Wage for Nigerian workers.

The ex-Deputy Governor of CBN stated: “In the debates on National Wages in Nigeria, we miss the fundamental point: there is little or no productivity in the economy.

“If we had a truly productive economy there is no reason we can’t have the kind of minimum wage of 400 or 500K that Labour wants.”

He also explained: “But we can’t, because the level of productivity in the economy cannot support it.

“Remember, the minimum wage is not just about government salaries. There are not more than 2, at most 3 million civil servants in Nigeria.

“It is even more about what is paid in the private sector, to household staff, etc.”

Moghalu added: “All of this is why, all things considered, including avoiding a Minimum Wage wage that multiplies already ravaging inflation (assuming such a wage can even be paid), I recommend a Minimum Wage of between N75,000 and N100,000.”

It’s unfortunate Organised Labour is rejecting N60,000 offer from government: MAN Director-General

ConsumerConnect reports amid the Organised Labour’s earlier threat, and eventual commencement of a national strike that paralysed the country’s economic activities between Monday, June 3 and Tuesday, June, 2024, Mr. Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), had appealed to the leadership of NLC and TUC to reconsider their decision on the industrial action over the tripartite committee’s inability to yet agree on a new National Minimum Wage.

Ajayi-Kadir, who had been on the part of the Organised Private Sector (OPS) in the multilateral committee on the Minimum Wage negotiation, made the appeal while featuring in a recent programme on Channels TV.

The Director-General of MAN asserted it was unfortunate that the Organised Labour rejected the N60,000 offer from the Federal Government and the OPS, but rather chose to declare a nationwide strike.

According to him, strike would not help matters in economy, because it in regard to damaging consequences of the strike on the macroeconomy, the situation would be a huge blow on the private sector, especially manufacturers already grappling with inadequacy in the macroeconomic environment in Nigeria.

The MAN Chief also emphasised that he does not believe that the Labour’s walking out of discussions and declaring strike would help matters in the economy.

He averred: “We cannot afford to cripple the economy, when all we needed to do is continue to build it.

“I think President Tinubu was very clear when he emerged as President that these are not going to be easy times.

“And I think we needed to tighten our belts to deliver on economy that we know has been seriously battered.”

Ajayi-Kadir, however, tasked the government to, on its own side, demonstrate leadership, sensitivity, and sense of and sense of mind as well as sense of occasion of the period that we are in.

“So, government expenditure, government choices of what needed to be done, how much to be spent, the cost of governance itself, all of it has to come to the table.

“I think what Labour is actually worried about is that they appear to be the ones on the brunt of it; but we needed to be able to engage, walking out on the process and declaring strike, I do not think that that is what is going to solve this issue,” stated he.

The MAN Chief added: “What we are saying is a situation that if we are not able to produce even with all the challenges we have, it is going to have a ripple effect, not only on our production process but on Labour itself.

“If we down tools and we are unable to produce, it is doubtful if we will be able to pay even the offer (N60,000) that the private sector and the government have agreed.”

Workers may face retrenchment, if new Minimum Wage is ‘too high’ for employers  -Senate

Commenting on the burning issue of evolving a new National Minimum Wage for Nigerian workers, the Senate at a session Tuesday, had explained there are several pending issues that should be resolved in the new Minimum Wage agitation.

Senate President Akpabio particularly, matters arising on the new Minimum Wage include possible retrenchment of workers, if the new Minimum Wage figure being negotiated is “too high” for employers to afford in the West African country.

Akpabio stated: “On our part, we will continue to do our best by making contributions and, at the same time, awaiting the incoming Bill on Minimum Wage for us to enact for the benefit of all Nigerians,” he stated.

The Senate President further cited the case of the current N30,000 Minimum Wage, which some States of the Federation and employers of labour have yet to pay till this day.

“Taking this motion will mean that we are jumping the gun, and we are trying to settle the issues for them.

“There are many variables that they will look at. Capacity to pay and the ability of states, local governments, and the private sector to even pay,” he said.

The Senate President remarked that the Tripartite Committee on the Wage matter would also be looking at the fact that if the Minimum Wage is too high, then the possibility of retrenchment of workers will occur.

“I think they will take comparative analysis to know that the last Minimum Wage, which was fixed by this Parliament as an Act of N30,000, was: How many states were able to pay, how many local governments were able to pay, and how many employers were able to pay?”

Akpabio further noted: “We’ll be looking at those things because it’s important that a holistic approach be looked at, and I have taken the suggestion that we should not rest until we arrive at an amicable resolution of the issue.

“The National Assembly should also continue to make its own contributions towards the ongoing negotiations.”

Kindly Share This Story

Kindly share this story