As election nears, Nigeria recommends 50 percent minimum wage rise


As election nears, Nigeria recommends 50 percent minimum wage rise
FILE PHOTO: Nigeria's President Muhammadu Buhari addresses the 73rd session of the United Nations General Assembly at U.N. headquarters in New York, U.S., September 25, 2018. REUTERS/Carlo Allegri/File Photo

In Summary

  • Labour Minister Chris Ngige said the government would send a bill to parliament proposing an increase in the minimum monthly salary to 27,000 naira ($88) from 18,000 now.
  • Africa’s top oil producer and most populous nation relies on crude sales for around two-thirds of government revenue, but lower prices pushed it into recession in 2016.

Nigeria’s government is recommending a 50 percent rise in the minimum wage weeks before a presidential election where the cost of living has become a major issue.

Labour Minister Chris Ngige said the government would send a bill to parliament proposing an increase in the minimum monthly salary to 27,000 naira ($88) from 18,000 now.

Africa’s top oil producer and most populous nation relies on crude sales for around two-thirds of government revenue, but lower prices pushed it into recession in 2016.

Though it emerged from the downturn in early 2017, growth remains weak and inflation hit a seven-month high of 11.44 percent in December.

Unions went on strike last year over the minimum wage, initially demanding a rise to 50,000 naira a month.

President Muhammadu Buhari, whose bid for re-election on Feb. 16 faces a strong challenge from main opposition candidate Atiku Abubakar, said in January he would increase the minimum wage but had not specified by how much.

“The National Council of State has approved a minimum wage of 27,000 monthly. A bill to this effect is to be forwarded to the National Assembly,” Ngige told reporters in Abuja.

Some government workers could receive a higher salary of 30,000 naira a month, the labor minister added.

He did not say when the bill would be sent to lawmakers.

Ngige announced the bill shortly before the central bank’s monetary policy committee decided to hold its benchmark interest rate at 14 percent.

“The MPC already made clear in its November statement that members do not consider a minimum wage increase, on its own, to be inflationary, given the current underperformance of the economy, and subdued demand,” said Razia Khan, chief Africa economist at Standard Chartered.

“The big question then is whether the minimum wage increase might prove to be the pre-cursor to other post-election reforms,” she added.

The government has previously argued that many of Nigeria’s 36 states struggle to meet existing salaries but unions said a review was needed because the last one was seven years ago.

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