Permit me to take your mind back to some years ago, when your salary was considerably lower than what it is today, yet you could still afford your rent, pay school fees, purchase medication from the pharmacy, settle hospital bills and, most importantly, put food on the table.
The question we should ask today is not simply: “How much do I earn?” The more important question is: “What can my income actually buy?” For many Nigerian households, food has become one of the biggest drains on household income. Unlike some expenditures that can be postponed, food cannot be postponed indefinitely. You may skip lunch occasionally, but breakfast and dinner remain basic necessities. This is why the debate around wages must go beyond the nominal amount written on a worker’s payslip. A salary increase means little if the cost of living increases even faster.
Transport is another major component of the household burden. The cost of moving from home to work and back has increased substantially in recent years. For many workers, transportation now consumes a significant portion of their income. I have even seen people who spend several nights at their workplace and return home only for a few days because the cost of commuting has become too high.
I first encountered this phenomenon in Rwanda and initially thought Nigeria had not reached that point. I was wrong. Economic pressure can force people to make choices that would previously have seemed unimaginable.
The Nigeria Labour Congress’s demand for a ₦500,000 minimum wage should therefore be understood within the context of the rising cost of living.
The current statutory minimum wage of ₦70,000 illustrates the challenge. If ₦70,000 is divided across 30 days, it amounts to approximately ₦2,333 per day. For a family of four, that is approximately ₦583 per person per day if the entire amount were devoted to food.
The question is simple, can ₦583 adequately feed one person for an entire day in today’s Nigeria? the calculation does not include cooking gas, water, transportation to the market, school expenses, healthcare, electricity, clothing, rent or other household necessities.
Recent Abuja food-cost estimates have put the monthly food requirement for an average family of four to five substantially above ₦70,000. This demonstrates the gap between statutory wages and the actual cost of maintaining a household.
If government increases the minimum wage to ₦500,000 or even ₦1 million but the cost of food, transportation, housing, electricity and other necessities rises proportionately, workers may not experience a meaningful improvement in their standard of living.
More money chasing the same limited supply of goods and services can simply translate into higher prices. In economic terms, the real issue is purchasing power, not the nominal figure on the payslip.
Beyond demanding higher wages, organised labour should also advocate policies that make everyday life more affordable. These should include affordable and reliable public transportation, affordable and reliable electricity, food security and lower food-production costs, accessible healthcare, affordable housing, protection of low-income earners from excessive taxation, stronger social protection, greater access to affordable credit and a predictable mechanism for reviewing wages when inflation significantly erodes purchasing power
President Bola Ahmed Tinubu declared a state of emergency on food security in July 2023, recognising the seriousness of the country’s food crisis. The intervention included measures aimed at increasing agricultural production and improving food availability.
But the challenge is that producing food in Nigeria has itself become increasingly expensive; farm inputs, fertiliser, seeds, transportation, machinery and labour all carry significant costs. Farmers also face insecurity, particularly in some of the country’s major food-producing regions.
When the cost of production rises, the farmer cannot sustainably sell below the cost of production. Eventually, those costs find their way into the price paid by the consumer.
This is why tackling food inflation requires more than distributing food to vulnerable households. Nigeria must reduce the cost of producing, transporting, storing and distributing food.
We cannot completely isolate Nigeria from external economic shocks, global energy prices, geopolitical conflicts, disruptions in international trade and exchange-rate movements can all affect the Nigerian economy. But Nigeria must concentrate on the variables it can influence and agricultural productivity is one of them.
Nigeria has enormous agricultural. potential, yet the country continues to face significant challenges in producing food at affordable prices. We also have substantial solid-mineral resources that can contribute to export earnings and economic diversification if properly developed and governed.
The objective should be to build an economy that is less vulnerable to external shocks and more capable of producing what Nigerians consume.
Labour demand conversation should therefore move from simply demanding “higher wages” to demanding “affordable livelihoods.” if workers earn more but spend the additional income on higher transportation fares, food prices, rent, electricity and healthcare, the wage increase will quickly lose its value.
If wages must be increased, Nigeria should also consider an inflation-adjusted wage mechanism that allows salaries to be periodically reviewed when inflation and the cost of essential goods significantly erode workers’ purchasing power. Such a mechanism could reduce the frequency of prolonged wage negotiations and industrial disputes while providing workers with greater predictability.
Affordable transportation should become a collective national priority. One short- to medium-term opportunity is Compressed Natural Gas (CNG). If Nigeria can make CNG sufficiently available and affordable, it could provide commercial transport operators with a potentially lower-cost alternative to petrol and diesel, subject to infrastructure, conversion, maintenance and supply constraints.
Government could encourage wider private-sector participation by creating incentives for filling stations to install CNG facilities, particularly along major transport corridors and in underserved urban and rural areas, the objective should not simply be to announce CNG programmes, but to build a network that ordinary commercial transport operators can actually access and afford.
The Nigeria Labour Congress, Trade Union Congress and Nigeria Employers’ Consultative Association have an important role to play in shaping this conversation. Rather than focusing exclusively on the figure attached to the minimum wage, organised labour, employers and government should negotiate around a broader social and economic framework for workers.
The real question is not whether Nigerian workers deserve higher wages. The real question is what economic conditions will ensure that the income Nigerians earn can provide a decent standard of living.
Nigeria needs an economy in which salaries have purchasing power; that is the difference between increasing the amount of money in a worker’s pocket and improving the quality of life of the Nigerian worker.
*Aliyu Ilias PhD,an Economist and Public Affairs Analyst, writes from Abuja
