Nigeria’s Productivity Level Can’t Support N400,000 Minimum Wage – Moghalu

 

Former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, has asserted that Nigeria’s current productivity level cannot sustain the N400,000 minimum wage demanded by the Nigeria Labour Congress (NLC). Moghalu made this statement on his official X handle on Tuesday.

 

The NLC initiated a nationwide strike on June 3, advocating for a new minimum wage. Both the NLC and the Trade Union Congress (TUC) have proposed minimum wages of N615,500 and N494,000, respectively, citing inflation and severe economic hardship.

 

Moghalu addressed this development by emphasizing the lack of productivity in the Nigerian economy. "In the debates on the national wage in Nigeria, we miss the fundamental point: there is little or no productivity in the economy," he stated.

 

He further explained, "If we had a truly productive economy, there is no reason we couldn’t have the kind of minimum wage of 400 or 500K that Labour 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."

Moghalu suggested a more realistic minimum wage range of between N75,000 and N100,000 to avoid exacerbating inflation. He highlighted that increasing productivity could be achieved through human capital development and improving electricity supply. "How productive is an average Nigerian worker? How skilled is he or she, and thus how much value does he or she create," he queried.

He also pointed out the complexities of the economic situation and the lack of political will to reduce government waste. In response to an X user’s query on enhancing economic productivity, Moghalu replied, "Human capital development. Skills that create value addition which is economically quantifiable. Wealth creation and profitability increases. Wages go up naturally. And, of course, the almighty ELECTRICITY."