Economic recession: Nigeria needs wage-led recovery

Economic recession: Nigeria needs wage-led recovery
September 11 12:14 2016

By Issa Aremu 

Organised labour believes that prompt payment of the existing salaries by states and local governments and urgent wage increases in both the private and sectors linked with productivity improvement are the smartest and quickest ways  to stimulate the nation’s economy. Nigeria needs wage led economic recovery.

Recent CBN report on the economy and to a large extent the latest report of National Bureau of Statistics observe that weak demand for goods is one factor responsible for low capacity utilization of many private sector companies. So to overcome the economic crisis, workers whose wages buy basic goods and services must not only be paid on time but their wages must be increased.

Nigeria cannot overcome recession with the existing miserable pay of workers and pensioners. To this extent President Muhammadu Buhari must urgently constitute the tripartite committee on the review of the current national minimum wage. Nigerian workers have long been in depression, not just recession going by the crisis of compensation manifesting in salary arrears and collapse of wages caused by massive Naira devaluation and price inflation  of close to 20 percent. There is wage income poverty that cannot help economic recovery.


Minimum wage was N125 ($240) in 1981. Then we had stable strong exchange rate and lower inflation. In real terms, workers in 1981 earned more than the current N18,000.00 minimum wage. The 2010 negotiated national minimum wage of N18,000 was about $120 in 2010.

With Naira devaluation, it  has  unacceptably fallen to less than $45 in 2016, a quarter of its nominal value in 2016 and  less than 1 per cent of its value in 1981 about 40 years ago worsening income poverty. For Nigerian economy to recover, there must be massive public spending in reconstruction and significantly mass spending by working people through improved wages. You also cannot fight corruption from below with poorly paid work force. Poorly paid worker is not only hungry but rightly angry and even vulnerable to corrupt practices.

Issa Aremu is the General Secretary of National Union of Textile Garment Workers, and NEC Member of the Nigeria Labour Congress (NLC).