Moghalu Says Nigeria Could Afford N500,000 Minimum-Wage With Production Economy (Details)

Moghalu Says Nigeria Could Afford N500,000 Minimum-Wage With Production Economy (Details)

Former Central Bank of Nigeria Deputy Governor, Kingsley Moghalu, has asserted that the Nigerian Government could pay a minimum wage of N500,000 if the country had an active production economy.

Amid ongoing negotiations between organized labour and the government regarding a wage increase, Moghalu stated that, given the current economic conditions, the government can realistically afford to pay between N75,000 to N100,000 as the new minimum wage.

Organized labour recently suspended its nationwide strike following a productive meeting with the government. While the government proposed a minimum wage of N60,000, labour demanded N494,000. A middle ground is being sought as negotiations continue.

President Bola Tinubu has instructed the Minister of Finance, Wale Edun, to determine the financial implications of the new minimum wage within the next 48 hours.

Moghalu emphasized that the low level of productivity in Nigeria’s economy constrains the government’s ability to meet labour’s demands. He noted that a higher minimum wage would be feasible if the economy were more productive.

Posting on X, Moghalu said: “In the debates on the national wage 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. 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.

“All of this is why, all things considered, including avoiding a minimum 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.”