Despite a recent boost in Nigeria’s minimum wage to ₦70,000, inflation has significantly eroded its purchasing power, reducing its real value to ₦52,473.76. Although the inflation rate has slightly decreased from 34.19% to 33.40%, the cost of living remains a pressing concern for many Nigerians.
The initial announcement of the wage increase brought hope to millions, particularly after the previous ₦30,000 minimum wage became insufficient to meet the rising costs of basic necessities. As prices for food, transportation, and utilities soared, the government’s decision to raise the minimum wage was seen as a potential lifeline. On July 18, 2024, President Bola Tinubu approved the new wage and committed to reviewing the national minimum wage law every three years, aiming to provide much-needed financial relief.
However, a report by BusinessDay reveals a sobering reality: after adjusting for inflation, the ₦70,000 wage is effectively worth only ₦52,473.76—a 25.04% decrease from its nominal value. This adjustment, based on the current inflation rate of 33.40%, starkly illustrates the persistent challenges workers face despite the pay raise.
The slight decrease in inflation, driven by a reduction in food inflation from 40.87% to 39.53%, has done little to alleviate the high costs of essential goods. A recent survey by BusinessDay highlights the ongoing strain: in major Lagos markets, a bag of rice now costs ₦80,000, beans are priced at ₦140,000, and staples like yam and bread are ₦5,500 and ₦1,700, respectively. Protein sources have also seen sharp price increases, with a crate of eggs costing ₦5,000 and a kilo of chicken at ₦5,500.
For many Nigerians, the wage increase has not translated into tangible financial relief. Aisha, a single mother of three in Lagos, was initially hopeful about the new wage. However, she soon realized that rising prices continued to outpace her earnings. “It feels like we’re going backward,” Aisha laments. “Even when the money comes in, it can’t sustain us for a month considering the cost of food.”
Similarly, retired civil servant Mr. Johnson has seen his pension’s value diminish as inflation eats away at his purchasing power. “I’ve worked hard all my life,” he says, “and now, in my old age, I can’t afford the basics.”
Despite these challenges, Nigerians are known for their resilience. Many have adopted coping strategies, such as cutting back on non-essential spending and relying on extended family support. However, these measures often come at the cost of a lower quality of life, with families reducing meals, skipping medical check-ups, and postponing necessary purchases.
The situation underscores the urgent need for more comprehensive measures to protect the purchasing power of Nigerian workers. While the minimum wage increase is a positive step, it is not sufficient on its own. The government must take decisive action to control inflation and ensure that economic growth benefits everyone.
One potential solution is implementing price controls on essential goods and providing subsidies to make them more affordable for low-income families. Addressing insecurity that disrupts supply chains is also crucial to stabilizing prices and ensuring food availability.
There is, however, a glimmer of hope: inflation has started to decline after nearly two years of relentless increases. If the government can sustain and build on the mechanisms that have reduced inflation, Nigerians might finally see a meaningful improvement in their wages and living standards.
To truly enhance the well-being of Nigeria’s working population, consistent and effective policy interventions are needed. Without them, the hope brought by the new minimum wage will remain just that—hope, with little chance of becoming reality. The government must now step up to secure a better future for all Nigerians.
This article is sourced from The BusinessDay newspaper, with minor edits and adaptations by The Spectacles for clarity and readability.
