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Moghalu: Nigeria Could Afford N500,000 Minimum Wage with Active Production Economy

Kingsley Moghalu, former deputy governor of the Central Bank of Nigeria (CBN), has asserted that the Nigerian government could pay a minimum wage of N500,000 if the country had a robust production-based economy. However, given the current economic structure, he believes a feasible minimum wage would range between N75,000 and N100,000.

Moghalu’s comments come in the context of ongoing negotiations between organized labor and the Nigerian government over increasing the minimum wage. The nationwide strike called by labor unions was recently suspended after productive discussions with government officials. While the government proposed a minimum wage of N60,000, labor unions have demanded N494,000. A middle ground is believed to be under consideration.

President Bola Tinubu has instructed the Minister of Finance, Wale Edun, to calculate the financial implications of the new minimum wage within 48 hours following the agreement.

In a post on X, Moghalu emphasized the correlation between productivity and wage levels. He pointed out that the lack of a productive economy limits the government’s ability to meet higher wage demands. He also highlighted that the minimum wage impacts not just government employees but also the private sector and household staff.

“In the debates on the national wage in Nigeria, we miss the fundamental point: there is little or no productivity in the economy. If we had a truly productive economy, there is no reason we can’t have the kind of minimum wage of 400 or 500K that labor wants. But we can’t, because the level of productivity in the economy cannot support it,” Moghalu stated.

He warned against a minimum wage that could exacerbate inflation and emphasized the need for a balanced approach that reflects the country’s economic reality. “All of this is why, all things considered, including avoiding a minimum wage that multiplies already ravaging inflation (assuming such a wage can even be paid), I recommend a minimum wage of between N75,000 and N100,000,” he concluded.

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