The United States government has said that Nigeria’s newly approved minimum wage of N70,000 is grossly inadequate to lift citizens out of poverty, as rising inflation and currency devaluation have eroded its real value.
In its 2024 Country Report on Human Rights Practices, the US noted that the minimum wage, which is equivalent to just $47.90 per month, falls below the poverty line and is rarely enforced by authorities across the federation.
“The National Minimum Wage (Amendment) Act 2024 doubled the minimum wage to N70,000 ($47.90) per month. Despite the increase, currency devaluation meant the wage was no longer higher than the poverty income level,” the report stated.
It added that many employers are exempted from the law, as companies with fewer than 25 employees are not mandated to comply, leaving a large portion of workers outside its coverage.
According to the report, several state governments have also declined to implement the new wage, citing financial constraints, while weak enforcement mechanisms continue to undermine compliance.
The US further observed that between 70 and 80 per cent of Nigeria’s workforce is engaged in the informal sector, where labour laws on wages, work hours, and safety are hardly enforced.
Although Nigeria’s labour laws stipulate a 40-hour work week, two to four weeks of annual leave, and overtime pay, the report revealed that enforcement remains poor.
It also noted that penalties for violations are minimal and rarely applied, leaving workers vulnerable to exploitation.
On labour rights, the report pointed out restrictions on unionisation, collective bargaining, and strike actions.
It highlighted that new trade unions cannot be registered with fewer than 50 members, while all wage agreements must be vetted by the National Salaries, Income and Wages Commission before becoming binding.
“The law limited the scope of collective bargaining and placed restrictions on workers’ right to strike,” it added.
Labour experts have repeatedly warned that the new minimum wage, while a significant increase from the former N30,000 benchmark, cannot meet the rising cost of living in Nigeria.
Recent reports indicate that a family may spend nearly 40 per cent of the monthly wage on cooking a single pot of jollof rice.
The US report concludes that Nigeria’s weak wage enforcement system, coupled with inflation and unemployment, continues to deepen poverty, leaving millions of workers struggling to survive despite government’s wage reforms.
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