The average Nigerian worker today, is four times poorer than he was when Obasanjo introduced the minimum wage
As we emphatically stated in our editorial of Wednesday, March 18, 2015, the Nigerian economy is on the brink. This position seems to be rightly confirmed by the new President of the Nigerian Labour Congress (NLC), Dr. Ayuba Wabba, when, in his maiden conference in Abuja, he stated that the N18,000 minimum wage is no longer realistic considering the economic situation in the country; as the impact of falling price of crude oil in the international market makes imperative for the minimum wage to be reviewed. To him, with the devaluation of the Naira by the Central Bank of Nigeria (CBN), the purchasing power of the average worker has been reduced.
There is no better way to subtly impoverish and, most likely, kill a people than to drastically reduce their purchasing power. This is aptly what the managers of the Nigerian economy are doing right now. As at the dawn of the 21st Century when the administration of former President Olusegun Obasanjo, introduced the N18, 000 minimum w age, which he tagged ‘living wage,’ the Naira exchanged about N90 to the dollar; which implied that the minimum wage was about $200. With the exchange rate currently at about N225 to the dollar, the minimum wage is now less that $50 per month.
The implication of that to the average Nigerian worker, today, is that he is four times poorer than he was when Obasanjo introduced the minimum wage. This seems to be the realization of the new NLC President, Wabba. It is a tricky situation, but it is doubtful if the government realizes the implication of a highly battered and weak currency on the economy and the citizenry. Besides, will the plight of the worker be assuaged with an increased salary package in the face of a badly managed currency, and by extension, the economy? Though Wabba may be asking for wage review as a soothing balm for the immediate problem, what the organized labour and indeed leaders of the various sectors of the economy need do is to seriously engage government on how to tackle the dwindling economic fortunes of the country, with a view to strengthening the Naira. For a country with an import oriented economy, such as Nigeria, the national currency cannot afford to be battered as the CBN has subjected the Naira; the consequences of which now stare us on our faces.
With the prevailing economic circumstances, it makes little sense to ask for salary increment when most of the 36 states owe a backlog of salaries and cannot even undertake any major project in infrastructure development. It is obvious that the economy is not functioning well; with or without the falling oil price and the managers of the economy are not endeavouring to make it work. Suffice to say, they are contended with sharing oil proceeds among the three tiers of government. Worried, it seems, the President might have inadvertently accepted the reality of worsening economic situation in the country through the reported cutting of his salary and those of the Ministers by 30%. How far that can go to boost the economy remains to be seen; if it is not meant to achieve cheap political point.