On Tuesday, the Senate and House of Representatives swiftly passed the 2024 National Minimum Wage Amendment Act Bill.
The bill, which went through second and third readings in both legislative chambers of the National Assembly within minutes of being transmitted by President Bola Tinubu, was approved separately by the Senate and the House of Representatives.
Following a unanimous vote after a clause-by-clause consideration in the Committee of the Whole, the National Minimum Wage Bill passed its third reading and was approved by the Senate.
President Tinubu is expected to sign the N70,000 minimum wage bill into law soon.
The organised labour and President Tinubu reached an agreement on the new minimum on Thursday, July 18 after weeks of intense negotiations between the federal government and labour unions, which initially insisted on N615,000 and then N250,000 as the minimum wage.
Upon the President’s assent, the new minimum wage officially replaces the existing N30,000 wage and is binding on employers in both the public and private sectors.
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Nigerian inflation has been on the rise, reaching a 28-year high of 34.2% in June 2024—about 200% higher than the 11.40% rate recorded in 2019 when the N30,000 minimum wage took off.
Daily Trust breaks down the new wage purchasing power in Nigeria’s current economy, sampling views of a cross section of workers in Lagos, Kano and the Federal Capital Territory based on four major expenditure parameters: feeding, transportation, house rent, electricity bill, clothing and miscellaneous expenses (covering laundry and other personal hygiene expenses).
The expenses are calculated on the assumption that the worker has no dependants.
Lagos workers turn elsewhere to pay rent, others
From one of our correspondents’ discussions with a number of workers in Lagos within the N70,000 pay grade, it was discovered that they spend an average of N2,000 on personal feeding daily (sometimes skipping a course meal), running into N60,000 per month. This means an average worker in Lagos spends about 90% of the new wage on feeding and transportation.
Many workers, who spoke to Daily Trust, said they spent between N600 and N1,500 on transport (depending on the distance) to and fro their workplaces every day. With an average cost of N1,000, a worker spends N20,000 on transportation monthly.
A room self-contained (with a personal toilet and kitchen) goes for N120,000–N350,000 per annum in many parts of Lagos and border Ogun communities. With an average of about N180,000, a worker pays N15,000 rent every month.
“If you live in an area under the Band A tariff, you can spend as much as N10,000 on electricity. But irrespective of the tariff category, the least you will spend on the electricity bill is N4,000, per month,” a worker in one of the Lagos ministries, who identified himself simply as Sola, told Daily Trust.
“For clothes and footwear, the minimum you can spend per year is N30,000 and they will be mostly okirika (second-hand wear),” said Josephine Alabi, a cleaner at a primary health care centre in the state.
This implies that workers like Alabi spend N2,500 on clothing and wear every month. She and others told Daily Trust they spend at least N5,000 monthly on haircuts and hairdos, laundry, toothpaste, bath soap, and other miscellaneous expenses.
Responses gathered show that an average Lagos worker needs a minimum of N106,500 to meet their personal basic expenditures monthly. But with the N70,000, they can only afford feeding, struggle with transportation fares, and have to source funds elsewhere to pay rent and electricity bills and meet other basic needs.
N70,000 not enough for personal feeding in FCT
In separate chats with Daily Trust, workers in the Federal Capital Territory (FCT) said the N70,000 is inadequate to meet the present economic realities.
To Bello Yunusa, who lives in a single-room apartment in the Kubwa area of Abuja, the minimum wage should have been pegged at N150,000.
Yunusa, who works as a security operative in a bank located around the Central Business District (CBD), said his rent was recently raised from N60,000 to N90,000 per year.
He said, “Honestly, no Nigerian will survive with N70,000 as the minimum wage with the current cost of living. I spend at least N2,000 on transportation to work daily; that’s N10,000 every week and N40,000 in a month.
“On feeding, I spend at least N3,000 daily (N90,000 per month) because a plate of food from a local canteen I patronise is now N1,500 upward. My electricity bill monthly is N1,400. I budget at least N80,000 for footwares and clothes a year (about N6,600 monthly).
“You can now see why it would be very difficult for an average worker like me to survive in Abuja with the new minimum wage. It is still very small and not enough to survive this economy, so Labour should have insisted on more.”
Another low-income earner, Abiodun Michael, said a chunk of his expenses fed into transportation to and from work, adding that he relied on gestures from his bosses, friends and family to survive.
Michael said, “Will this new minimum wage stop the consistent rising costs of foods and services? The answer is no.”
Kano worker needs N72,900 to survive without dependant
Enquiries by one of our correspondents revealed that in Kano, an average worker spends N1,500 on food daily (N500 per meal), making N45,000 per month.
Transportation to and from work daily is N600 (N12,000 monthly) on average, while the annual rent for a single room goes between N50,000 (N4,166 monthly) and N150,000 (N12,500), depending on location, with an average of N100,000 (N8,300) per annum.
It was gathered that electricity bill costs between N2,500 and N6,000 monthly, with an average of N3,500.
“On soap, toothpaste, body cream, detergent, water for drinking and domestic purposes, etc., I spend a minimum of N6,500 every month,” a civil servant, Abdullahi Idris, said.
“If you want to be very prudent, you will buy at least three sets of clothes per year at an average of N8,000 per set and two pairs of footwear at the rate of N4,000 each. Altogether, that is N32,000 (N2,600 monthly),” another worker, Ibrahim Baba, explained.
Over all, an average worker in Kano will need at least N77,900 to survive every month without having to cater to any dependants—wwife, children, parents, siblings, among others.
Will inflation drop?
In its recent Global Economic Outlook, the International Monetary Fund (IMF) gave a cheering projection of Nigeria’s economy, indicating a significant drop in the inflation rate by 2025.
“We see inflation declining to 23 percent next year and then 18 percent in 2026,” Division Chief of the IMF Research Department, Daniel Leigh, said during the IMF/World Bank Spring Meetings in Washington D.C. in April.
But experts say the current economic indices cast doubt on the IMF projection.
“Sometimes they just make projections. Maybe they have seen the government policies and feel that with those policies, inflation will drop. But it’s a projection. There are a lot of factors that affect inflation in Nigeria. It’s not like America, where they have market forces working,” an economist, Prof. Sheriffdeen Tella, said.
“They had made projections that were later revised based on new information. So those projections are not reliable,” he added.
Prof. Tella, however, said the new minimum wage might not necessarily push up inflation.
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