Kingsley Moghalu, the former Deputy Governor of the Central Bank of Nigeria, has posited that a national minimum wage of N500,000 is feasible for the Nigerian Government, provided the country boasts an active production-based economy.

Currently, he believes the government is only capable of implementing a minimum wage ranging from N75,000 to N100,000 due to the absence of such an economy.

This statement comes amid ongoing discussions between organized labor and the Nigerian government regarding an increase in the national minimum wage.

The labor union initiated a nationwide strike on Monday, June 3, which was subsequently suspended the following day after the government agreed to engage in dialogue with labor representatives concerning a wage increase.

The government initially proposed a minimum wage of N60,000, subject to potential increments, while organized labor maintained their stance for N494,000.

In the midst of these negotiations, President Bola Tinubu instructed the Minister of Finance, Wale Edun, to assess the financial implications of the proposed new minimum wage within a 48-hour timeframe.

Addressing the situation, Moghal underscored that the minimum wage debate should not solely focus on government salaries, which affect a relatively small portion of the population, but also consider the broader implications for the private sector and household staff.

Moghalu cautioned against setting a minimum wage that could exacerbate the already severe inflation, recommending a balanced approach that considers economic productivity and inflationary pressures, ultimately advocating for a minimum wage within the range of N75,000 to N100,000.

He wrote; “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 labour wants. But we can’t, because the level of productivity in the economy cannot support it.

“Remember, the minimum wage is not just about government salaries. There are not more than 2, at most 3 million civil servants in Nigeria. It is even more about what is paid in the private sector, to household staff, etc.

“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.”