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Nigeria’s new minimum wage: too much to ask?
LAGOS, Nov 11, 2018 (BSS/AFP) – On the campaign trail for re-election in
February, Nigeria’s President Muhammadu Buhari may have spoken too soon when
he backed an initiative to hike his country’s minimum wage by a whopping two
thirds.
Buhari, who had been advised on the wage by a negotiating committee made
up of union representatives, the government and the private sector, praised
the “patriotic and professional” members.
The recommendation to hike the minimum wage to 30,000 naira ($82, 72
euros) from 18,000 was “realistic, fair and implementable” and would be
studied by the executive “within the shortest possible time”, before being
returned to parliament for final approval, he said.
The unspoken agreement was that Nigeria’s unions, which had threatened to
paralyse Africa’s largest economy of more than 180 million people with a
massive, open-ended strike, would deliver their members’ vote to Buhari in a
presidential poll set for February 2019 in return for the pay hike.
But the very next day the information minister poured cold water on the
idea, claiming that the Nigerian government had in no way acceded to the
30,000 naira demand and said this “recommendation should first be studied”.
Standing in the way of Buhari’s strategy to win the popular vote with the
wage promise are the 36 state governors who say they are already struggling
to pay civil servants and public officials with the current wage.
David Umahi, governor of southeast Ebonyi state, warned this week that the
30,000 naira minimum wage for public servants couldn’t work.
“Many states are experiencing various problems and cannot pay salaries,”
he told reporters after Buhari’s remarks.
– ‘Sensible compromise’ –
Even if it went through, a higher wage would still be modest given that a
25-kilogram (55-pound) bag of rice costs nearly 10,000 naira.
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“It is very low considering the cost of living,” Charlie Robertson,
Renaissance Capital economist and Nigeria specialist, told AFP.
But attempting to do more would be unrealistic because Nigerian businesses
already have high overheads, and many workers are unqualified, making a pay
hike hard to justify, he said.
Nigeria’s patchy power supply is another factor undermining the
competitiveness of businesses, and therefore their margin for any wage
increase.
“Nigeria’s difficulty on the minimum wage is that because its electricity,
literacy are less than most countries, its wages must be less too. Or it will
attract no foreign investments,” Robertson said. “30,000 is a sensible
compromise but still debatable.”
Ivory Coast, for example, has a higher minimum wage than Nigeria but its
good energy network still allows it to stay competitive with its West Africa
neighbours.
In contrast, electricity is almost non-existent in most of Nigeria and the
literacy level of the adult population is close to 60 per cent, a number that
falls to less than 50 percent in the predominantly Muslim north.
– Staggering inequality –
Nevertheless, it will be hard to explain to voters that Nigeria, Africa’s
largest oil exporter producing more than two million barrels per day can
neither afford a modest minimum wage for its civil servants nor provide a
decent level of education and infrastructure to attract investors.
Several months ago, a senator caused a scandal by revealing lawmakers’
salaries: 14.25 million naira a month with bonuses, making it one of the
highest salaries of politicians in the world.
At 30,000 naira, it would take 35 years for a Nigerian worker to earn what
deputies make in a month, and 68 years at the current minimum wage level of
18,000 naira.
Life expectancy in Nigeria is barely above 53.
There is hardly a better reflection of the staggering inequality in
Nigerian society.
On the eve of a presidential election and after two years of painful
recession beginning in 2016, voters are demanding accountability.
“Where are you going to find the money to pay the salaries?” asked Gbenga
Omotoso, a columnist in the normally pro-government newspaper The Nation.
“Reduce these outrageous wages, force the rich to pay their taxes, pursue
the corrupt and engage the economy in a real program of diversification.”
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