Moghalu: Nigeria could afford N500,000 minimum wage with active production economy

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Former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has asserted that the Nigerian government could potentially pay a minimum wage of N500,000 if the country had a robust production economy.

However, Moghalu noted that due to the current lack of a productive economy, the government can only realistically propose a minimum wage between N75,000 to N100,000. This statement comes amid ongoing negotiations between organized labor and the Nigerian government regarding an increase in the minimum wage.

The organized labor unions recently suspended their nationwide strike after productive discussions with the government on workers’ pay raises. The government had initially proposed N60,000 as the new minimum wage, with the possibility of an increase, while labor unions demanded N494,000. It is believed that a compromise is being reached as negotiations continue.

Following these negotiations, President Bola Tinubu instructed the Minister of Finance, Wale Edun, to calculate the financial implications of the proposed new minimum wage within 48 hours.

Despite these developments, Moghalu emphasized that Nigeria’s current production levels could only support a minimum wage in the range of N75,000 to N100,000.

Posting on X, Moghalu stated: “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 labor 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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