By Fatimo Bakare
The N70,000 minimum wage approved by the Federal Government has had a devastating impact on Small and Medium-scale Enterprises (SMEs) in Nigeria, culminating in a staggering 60 percent reduction in their labour force. This drastic measure was taken by numerous firms in the private sector to remain afloat and comply with the government’s directive. The government had criminalised the non-payment of the new wage by the private sector.
The SMEs, which contribute more than 80% of employment and around 50% of the nation’s GDP, are facing significant challenges as they swim in the ocean of the nation’s economic quagmire. A number of businesses in this sector are either dead, dying, or are struggling to navigate the turbulent waters of the economic downturn. Daily Sun investigations revealed that a number of firms in the private sector have had to lay off between 50 and 60 percent of their workers in order to be able to pay the forced wage.
In their reactions, which underscore the dire consequences of the minimum wage policy on SMEs, emphasizing the need for a review of the government’s approach to support workers’ welfare without compromising economic stability, private business operators bare their minds on what they perceive as a monster hunting their businesses.
The private business owners who spoke in Lagos, the industrial capital of Nigeria, opposed the new minimum wage, insisting that it would bring more hardship on the Nigerian workers. They opined, instead, that what the government should have done was create an enabling environment for producers of goods and services to produce at low costs. They said that once that is achieved, the government could then institute price control measures to bring down prices of goods and services.