On July 29th, 2024, President Tinubu signed the least wage bill for N70,000, which more than doubled the show wage, below what the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) initially demanded. In perspective, the federal government sets the Nigerian minimum wage for federal workers and the State government for State workers, which is usually a fixed rate. To understand what the Nigerian minimum wage should be in today’s naira value, it is essential to understand what indicators are used to decide the value to be paid out, like inflation, economic situation, and cost of living. The NLC and TUC heavily used the cost of living and other factors to come up with a total of N250,000, about 3.5 times the signed amount.
To keep things simple, if we calculate the 2024 minimum wage based on the Governor of Edo State, Obaseki’s calculation uses the exchange rate as the primary factor and justifies his recent increment to N70,000. The table shows a side-by-side comparison of inflation, the US dollar (USD) exchange rate to the Naira, and the minimum wage from 2011 to 2024. Despite the rapid rise of inflation and the humbling of the naira against the USD, the minimum wage remains unchanged from 2011 to 2018 at N18,000, from 2019 to 2023 at N30,000 and now at N70,000, as shown in the figure.
Table 1 :

Figure 1:

Thus, using the Cumulative inflation formula from the table for 2011 to 2024 =7.46
7.47 x $160 = $1,195.2
$1,195.2 * $1,609(Current USD/NGN rate) = N1,923,076.8k

In today’s value, the Nigerian government should sign a bill around this Naira value of N1,923,076.8k or work with the actual amount of N615,000 initially proposed by NLC and TUC or better, N250,000 that was demanded.

Do you think the federal government can afford to pay the wage proposed by NLC in light of the current economic situation? Leave a comment and let me know what you think.

Sources
Anichukwueze, D. (2024). Minimum Wage: N250,000 Demand Remains Until End Of Discussions With Tinubu – Labour. Channelsnews.com. https://www.channelstv.com/2024/07/11/minimum-wage-n250000-demand-remains-until-end-of-discussions-with-tinubu-labour/
CBN. (2024). Central Bank of Nigeria: Money and Credit Statistics. Cbn.gov.ng. https://www.cbn.gov.ng/rates/inflrates.asp?year=2024
Nigeira Labour Congress. (2024). 2024 National Minimum Wage Negotiation: How we arrived at N615,000. In https://www.nlcng.org/5806-2/.
River. (2021). Cumulative Inflation | River Glossary. River; Cumulative Inflation | River. https://river.com/learn/terms/c/cumulative-inflation/#:~:text=Cumulative%20inflation%20is%20calculated%20byTaiwo, E. (2024). Nigeria’s minimum wage in numbers: From N125 in 1981 to over N490k demand in 2024. Vanguard. https://www.vanguardngr.com/2024/06/nigerias-minimum-wage-in-numbers-from-n125-in-1981-to-over-n490k-demand-in-2024/#:~:text=Over%20the%20years%2C%20the%20minimum,of%20N30%2C000%20per%20month.
Yahoo. (2024). Yahoo Finance. https://finance.yahoo.com/quote/NGN=X/

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