By Professor Gesiye Salo Angaye and Dr. Preye Angaye

If government really wants to improve Nigerians’ lives, it needs to look far beyond the pay cheques of public servants

Nigerian workers, through Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have reopened wage negotiations, demanding a “living wage” ranging from ₦100,000 to ₦250,000 with some union factions demanding up to ₦1,000,000 per month.

Nigerian Governor’s Forum has proposed ₦100,000. At the state level, Imo State has unilaterally raised the minimum wage to ₦104,000, while Lagos and Rivers States have raised it to ₦85,000.00

The National Minimum Wage Act of 1981 fixed the minimum wage at N125 per month. Successive reviews raised the wage to N18,000 in 2011, N30,000 in 2019, and N70,000 in 2024.

When President Bola Tinubu signed the new ₦70,000 minimum wage into law on 29 July 2024, it was hailed as a turning point for Nigerian workers. Labour leaders celebrated. State House aides called it a promise kept. But almost two years on, a harder question is worth asking: has doubling the minimum wage actually made Nigerians better off?

The honest answer is: not much, and not for long and for most Nigerians, not at all. A closer look at the numbers shows that a wage increase, however well-intentioned, cannot by itself lift a nation out of hardship. Without matching reforms in productivity, inflation control, and public investment, a bigger pay cheque for some can quickly become a bigger problem for everyone.

A RAISE THAT VANISHED INTO PRICES

The timing tells its own story. The new wage was agreed just months after the government removed the petrol subsidy and let the naira float freely, two decisions that had already sent the cost of living soaring. By the time Tinubu put pen to paper on the Minimum Wage Act, inflation had already crossed 34 per cent, according to the National Bureau of Statistics. Food prices, the thing that matters most to ordinary households, were rising even faster, touching almost 40 per cent by December 2024.

Economists have a name for what tends to happen next: the wage-price spiral. Government raises wages. Landlords, sensing that tenants suddenly have more naira in their pockets, raise rents. Transport operators raise fares. School proprietors raise fees. Traders raise the price of garri, rice and tomatoes. Private employers, under pressure to keep pace with the new public sector benchmark, raise their own costs and pass the difference on to customers. Within months, much of the extra ₦40,000 that public servants gained on paper has quietly disappeared into a higher cost of living.

“A pay rise that isn’t matched by more goods and services on the shelves rarely stays a pay rise for long. It becomes a price rise instead.”

This is not simply theory. Nigeria has been here before. Similar patterns followed the wage reviews of 2011 and 2019: workers cheered a higher number on their payslip, only to watch it lose much of its value within a year or two as prices adjusted around them.

THE NINE IN TEN NIGERIANS THE LAW DOESN’T REACH 

Perhaps the bigger problem is who the minimum wage law simply cannot help. According to the NBS Labour Force Survey, roughly 93 per cent of employed Nigerians work in the informal economy as market traders, commercial bus and okada riders, artisans, tailors, hairdressers, smallholder farmers and small business owners. Only about one in ten Nigerians holds a formal wage job of the kind the minimum wage law actually covers.

For that vast informal majority, the ₦70,000 minimum wage changes nothing directly. No employer is legally bound to pay them more. Many already earn far less than ₦70,000 a month, some scraping by on ₦40,000 or less. Yet when rents, transport fares and food prices rise in the wake of a nationally publicised wage increase, these Nigerians feel every bit of the pain without a matching gain. In effect, a policy designed to help workers can end up quietly squeezing the very people it was never designed to reach.

A NATION OF UNEQUAL STATES

Then there is the question of who can actually afford to pay. Nigeria’s states are not equal. Lagos alone generated over ₦815 billion in internally generated revenue (IGR) in 2023. Rivers followed with over ₦195 billion. At the other end of the scale, states such as Taraba, Yobe and Kebbi generated barely ₦11 billion to ₦12 billion each, a fraction of what wealthier states raise, and often not enough to cover salaries, let alone build roads, schools or hospitals.

It is little surprise, then, that implementation of the new wage has been patchy and, in places, openly contested. More than a year after the law took effect, trade unions were still reporting that around 20 states had failed to pay the ₦70,000 rate to local government workers and primary school teachers. In the Federal Capital Territory, teachers went on strike four times in four months, shutting down schools in protest at unpaid wages.

This is not simply a story of unwilling governors. Many state governments genuinely cannot afford a wage bill designed with Nigeria’s richest states in mind. A national wage floor that ignores these vast differences in fiscal capacity all but guarantees that poorer states will either default, borrow, or starve other essential services of funding to keep up appearances.

A SMARTER WAY TO SET WAGES

None of this means Nigerian workers do not deserve better pay, they clearly do. But it suggests the current one-size-fits-all approach needs rethinking. Rather than a single national figure imposed uniformly on 36 states with wildly different resources, government could set a national wage floor affordable to most states, while allowing states with genuinely limited revenue to negotiate a transparent, publicly disclosed phase-in period, instead of the current pattern of quiet, unexplained non-payment. States would also need real support and pressure to grow their own revenue base, so that affordability improves over time rather than remaining a permanent excuse.

POLICY RECOMMENDATIONS: TOWARDS INCLUSIVE AND SUSTAINABLE WELFARE IN NIGERIA

The foregoing analysis suggests that while the national minimum wage remains an important instrument for protecting workers, it should not constitute the principal strategy for improving the welfare of Nigerians. Lasting prosperity requires a comprehensive policy framework that promotes productivity, inclusive growth, and efficient public service delivery.

The following recommendations are therefore proposed.

1. Maintain a National Minimum Wage as a Social Protection Measure

Nigeria should retain a statutory national minimum wage to protect workers against exploitation and extreme poverty. However, future wage reviews should be guided not only by inflation but also by labour productivity, economic growth, government revenue, and fiscal sustainability.

2. Link Wage Growth to Productivity

Governments should introduce programmes that improve productivity throughout the public service. Better training, digitalisation, performance evaluation, merit-based promotion, and stronger accountability should accompany future salary adjustments. Higher productivity should justify higher wages, thereby reducing inflationary pressures.

3. Give States Greater Fiscal Flexibility

While maintaining a national minimum standard, governments should recognise the differences in the fiscal capacities of Nigeria’s states. Through dialogue with organised labour and other stakeholders, states should have reasonable flexibility to negotiate wage structures that reflect their economic realities, provided that workers’ basic rights are protected.

4. Invest More in Human Capital

Greater public investment should be directed towards free, high-quality basic education, vocational and technical training, healthcare, nutrition, and skills development. These investments strengthen human capital, improve productivity, and increase long-term national income. Improved education will produce a more productive workforce capable of earning higher incomes throughout life.

Roughly seven in ten Nigerians pay for healthcare entirely out of their own pockets, and fewer than one in ten have any form of health insurance. A single hospital bill can push a family into poverty overnight. Expanding the new National Health Insurance Authority scheme, particularly for the poor and informally employed, would protect millions from exactly the kind of shock that no wage increase can cushion.

5. Improve Infrastructure

Reliable electricity, potable water, efficient transportation systems, digital connectivity, and modern communication infrastructure should become national priorities. Lower production costs will encourage private investment, expand employment, and raise living standards.

6. Modernise Agriculture and Strengthen Food Security

Government should expand access to agricultural credit, improved seedlings, fertilisers, mechanisation, irrigation, extension services, storage facilities, and rural roads. A more productive agricultural sector will improve food security, reduce inflation, and increase rural incomes.

7. Support Micro, Small and Medium-sized Enterprises

Small businesses are the backbone of Nigeria’s economy. Easier access to affordable finance, business advisory services, digital technologies, and simplified regulations would enable these enterprises to expand, employ more Nigerians, and contribute more significantly to economic growth.

8. Strengthen Fiscal Responsibility

Governments at all levels should manage public finances prudently. Recurrent expenditure, including personnel costs, should not crowd out capital investment in schools, hospitals, roads, water supply, and other productive infrastructure. Sound fiscal management is essential for sustainable development.

9. Promote Progressive and Fair Taxation

Tax policy should ensure that individuals and corporations with greater ability to pay contribute fairly towards financing public services. At the same time, government must improve transparency and accountability so that taxpayers can see tangible improvements in public service delivery.

10. Place Quality of Life at the Centre of Public Policy

The ultimate objective of economic policy should be to improve the quality of life of all Nigerians. Government performance should therefore be assessed not only by wage increases but also by measurable improvements in education, healthcare, employment, housing, infrastructure, environmental quality, security, and the overall well-being of citizens.

TOWARDS A NEW SOCIAL CONTRACT

Nigeria stands at an important moment in its development. The country possesses abundant human and natural resources, yet millions of its citizens continue to experience poverty, unemployment, and inadequate public services.

The time has therefore come to redefine the relationship between government and the people. Citizens rightly expect more than periodic salary reviews. They expect competent governance, prudent management of public resources, equal opportunities, and public services that enhance their daily lives.

A new social contract should rest on three pillars: productive employment, efficient public institutions, and improved quality of life. When these foundations are firmly established, higher wages will emerge naturally from a stronger and more productive economy rather than from repeated emergency responses to inflation.

Such an approach offers Nigeria the best prospect of achieving inclusive, equitable, and sustainable national development.