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The direction of the Nigerian minimum wage negotiations is a cause for worry. Sadly, both Labour and the Government favour political optics rather than finding a pathway that leads to the common good. To the bystander, it is beginning to appear like a dialogue of the deaf, with both sides avoiding the issue that brought them to the negotiation table. Unlike their posturings, the major issue is not an appropriate minimum wage for the Nigerian worker. It is rather how to transform whatever minimum wage paid to the worker into a living wage in Nigeria, whether N30,000 or N60,000 as proposed by the government or N494,000 as wished for by Labour.
More worrisome is the Government’s attitude to the negotiation. The Government argues that the N494,000 monthly minimum wage proposed by Labour is both unreasonable and unsustainable. This argument is based on the claim that many states and private sector employers hitherto found it challenging to pay workers the N30,000 minimum wage. It may be true but this does not make it less of a specious argument, one that is superficially plausible but actually wrong. What is shocking is that the government appears incapable of identifying and boldly facing the elephant in the room, which is dwindling productivity in Nigeria.
Poor productivity, as a presidential candidate trumpeted throughout the 2023 electioneering season, sometimes appears like a foreign concept even to the educated. I shall use my personal experience and my current situation as an employer to show why the current administration appears to be lacking in imagination and boldness of vision.
When I arrived in Lagos in July 1986 to assume duties as a staff writer in The Guardian, my starting monthly salary was N350. After taxes and other deductions, I could still afford a one-bedroom apartment with a take-home pay from this salary. The more adventurous teamed up to rent 2- and 3-bedroom apartments in more accessible neighbourhoods. With this salary, no reporter (except the profligate) borrowed money to transport themselves to work. It was enough to feed, clothe, and do other things those entry-level workers did in the name of chopping life. What is more, as journalists who neither demanded nor accepted brown envelopes, we still managed to have the best time of our lives.
Why was N350 a sustainable income to a recent graduate at that time? The Guardian provided quality content to a critical mass of discriminatory readers that businesses wanted to reach with their products and services. While these readers rewarded us with patronage of our first-rate product, businesses jostled for advertising spaces in the newspaper. They could advertise because there were products on the shelf that needed to be offloaded, and factory machines that hummed at their fully-installed capacities to churn out more. Such wholesome productivity ensured that supply outstripped demand in the market, thereby forcing prices to remain within reach of our take-home pay. Most school leavers found employment in the public and private sectors of a healthy economy. Our local currency, the naira, could have regained its prior strength over the US dollar if only we managed to curb our cultivated appetite for foreign goods.
Contrast this with the situation that Nigeria currently finds itself in. Public policies, exacerbated by massive thievery at all tiers of government, have astronomically driven up costs of production and costs of living. The middle class can no longer cope with geometric increases in costs of goods and services.
Is this situation likely to be reversed soon? The answer will be found in policies of this Government that are capable of empowering industries and other businesses to grow and which will, in turn, boost the supply of products to reduce or halt rising prices and absorb the growing army of the unemployed. Inexplicably, the policies we see hurt rather than heal the growing number of distressed and terminally ill businesses in Nigeria. Who is surprised that foreign businesses are fleeing Nigeria to protect what is left of their investments while millions of local SMEs are folding up? This is not speculation because I write as a victim of the current policies. My online business folded up last month, throwing eight people into unemployment. This happened not because I am Igbo, not because we produced substandard content, and not because we are poor managers. It happened because, like other ethically-compliant news publications, local businesses can no longer afford to advertise with us. In addition, most quality news publications are having to cope with the onslaught of fake news and gossip publishers that a beleaguered population seeks out to manage the stresses of life. The cutthroat international advertising services controlled mainly by Google is another matter altogether. Add this to the deliberately instituted rising cost of doing business and there you have it.
If a government insists on removing subsidies (which is accepted by all forms of government in the world), goes ahead to levy more taxes, approves upward review of all utility tariffs (including for social services), and raises interest rates to 26.25%, all within a year, how on earth does it expect such policies to stimulate the economy, spark establishment of new industries, reduce the cost of goods and services, and boost employment? There may be a rational (read economic) explanation for why the policies are necessary but as an employer of labour, my hope is not renewed at all. And I am not alone; the government is yet to inject the sort of confidence that Nigerian businesses need to hope that the economy will improve soon. We are yet to establish the nexus between the policies and the ultimate goal of increasing productivity in Nigeria.
To return to Labour-Government negotiations, it does not therefore make a difference whether the Government agrees to pay Labour monthly minimum wage of N494,000, or that Labour agrees to Government’s counteroffer of N60,000. Even if the Government agrees on a monthly minimum wage of N1,000,000, this won’t make a difference to the cost of living of the average worker. We shall merely be upgrading our country and its currency to the level of life in Zimbabwe.
What Labour and Government ought to be negotiating are, therefore, specific policies that will return the Nigerian people to work by supporting and boosting local production to discourage imports, alleviating the current hardships through subsidies (not palliatives), enabling people to go about their businesses without fear, and forcing the pirates in government and their outside collaborators to stop stealing the country blind. All of this will go a long way to boost confidence, raise production, and improve the cost of living to the level where N60,000 will become a living wage for the average worker.
Anything and everything else will be superficial and a recipe for disaster.
Next Week
“The self-appointed guardians of Igbo history and culture now compel Southeasterners to sit at home every 30th May. Exasperated citizens are turning to the South East governors to end the mess by formally proclaiming the day as a national holiday in the region. But are the governors willing to do this and do they have the power? How will South East governors justify setting aside 30 May to honour Biafra civil war veterans of Igbo extraction? What happens to veterans of Igbo extraction outside South East and non-Igbo Biafra veterans from the former Eastern Region? Will our new guardians, after subduing the South East, move to Akwa Ibom, Bayelsa, Cross River, Rivers, and Delta states to enforce 30th May as a sit-at-home holiday too?”
Rethinking the Biafra Heroes Day. Keep a date with us.
