Former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has stated that the Nigerian government could afford to pay a minimum wage of N500,000 if the country had a robust production economy.
However, due to the current lack of such an economy, he believes the government can realistically pay a minimum wage between N75,000 and N100,000.
Moghalu’s comments come amidst ongoing negotiations between organized labour and the Nigerian government regarding an increase in the minimum wage.
Recently, labour unions suspended a nationwide strike after a successful meeting with government officials, where discussions about increasing workers’ pay took place.
The Nigerian government initially proposed a new minimum wage of N60,000, while labour unions demanded N494,000. A compromise appears to be in the works as negotiations continue.
Following the recent agreement, Bola Tinubu instructed the Minister of Finance, Wale Edun, to determine the financial implications of the new minimum wage within 48 hours.
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Despite these developments, Moghalu emphasized that Nigeria’s current production capacity only supports a minimum wage between N75,000 and N100,000.
Posting on X, Moghalu wrote: “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.”
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