Home Features Nigerian workers’ wages diminish as inflation rises and gov’t revenue dips | Business and Economy

Nigerian workers’ wages diminish as inflation rises and gov’t revenue dips | Business and Economy

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Nigerian workers’ wages diminish as inflation rises and gov’t revenue dips | Business and Economy

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Lagos, Nigeria – When Yusuf Mogaji joined Nigeria’s federal civil service as a non-teaching staff member at the University of Ilorin in 2015, he had dreams of building his own house. His monthly salary of 46,000 naira (then worth $236) was enough to cater for himself and his family and even buy a half-plot of land (300 square metres) later that year.

Eight years and four civil service appointments later, the land has remained untouched and Mogaji’s aspirations are no longer a priority as he is finding it difficult to feed himself and his family of three.

The value of the naira has plummeted such that even though his net salary has increased to 57,000 naira, the dollar equivalent in 2023 is $68.06 – $167.94 lower than what he earned in 2015. Almost half of the new earnings now go into transporting himself to and from work.

“Is it the money that is not even enough for me to feed that I will use to invest? There was a time when government work was great, but now there is nothing like that again,” Mogaji said.

Since 2015, Nigeria has experienced two recessions and its economy has been ravaged by the vagaries of global oil prices, the COVID-19 pandemic and Russia’s continuing war in Ukraine. In June, the country’s Debt Management Office said the government is servicing debts with at least 73.5 percent of its revenue, making it struggle to meet basic responsibilities.

Inflation is currently at an 18-year high – at 26 percent – in Nigeria as the naira continues to plunge in value against the dollar. The economic realities became grimmer when Bola Tinubu, elected president in February, devalued the naira and removed a decades-long fuel subsidy which had helped lower living costs. Mogaji has cut back on the amount of regular food and household items he purchases, including rice, semolina and even nappies because their prices have tripled.

The Nigeria Labour Congress, a major trade union coalition in the country, has repeatedly threatened to shut down the economy in protest against the government’s refusal to increase workers’ salaries despite the enormous spike in the cost of living. Nigeria’s minimum wage currently stands at 33,000 naira ($39.40).

During the independence speech, the government compromised by opting for an additional 35,000 naira ($41.79) wage award for six months. Al Jazeera spoke with Mogaji and three other workers who said this is barely enough.

“Even the salary is just for food and the remaining to transport yourself to work, there is nothing left. And they [the government] said the palliative is for six months. After the six months, will things go back to the way it was before? We will be back to square one,” he said.

Police officers control traffic during a Lagos protest
Police officers control traffic as protesters block the domestic terminal of Murtala Muhammed International Airport during a strike over working conditions and wages, in Lagos, Nigeria, on April 17, 2023 [Temilade Adelaja/Reuters]

‘A rock and a hard place’

As Nigeria’s economy worsens, an increase in the minimum wage has been the core demand of various workers’ unions. According to experts, salary increases cannot materialise because Africa’s biggest economy is broke and can barely fund its expenditure. Temporary remedies, they add, will barely help beneficiaries.

“There is no other answer than the inflation to be brought down and for inflation to stay down. The honest truth is that for anybody earning in naira, a 26 percent inflation rate ensures you are going nowhere no matter who you are; your monthly salary more or less does not matter,” Joachim MacEbong, a senior analyst at Lagos-based economic insights firm Stears said.

“The money is just not there. Nigeria’s total revenue is five trillion naira and under; you cannot do anything with that amount of money for a country of 200 million people,” he said.

Workers say they are not to blame for the country’s situation amid decades of corruption and wasteful government spending during economic booms.

“Unfortunately, there is a cost to that kind of governance that does not look to avert long-term pain. There is nothing we can do,” Amara Nwankpa, director of public policy initiatives at the Shehu Musa Yar’Adua Foundation, told Al Jazeera. “We can postpone it one or two more years but at the end of the day, the chickens will still come home to roost and that is the reality – the Nigerian workers are between a rock and a hard place.”

A bus with a caption Yoruba language that translates to "hardwork does not guarantee money" at Onipanu, Lagos
A bus with a caption in the Yoruba language that translates to ‘hard work does not guarantee money’ at Onipanu, Lagos [Anthony Obayomi/Al Jazeera]

‘Liveable wage’

Since Tinubu announced his raft of economic reforms, many workers, even at the state level, have been clamouring for comprehensive policies to cushion the associated shocks.

Nigeria’s food inflation hit 30.64 percent in September, according to the National Bureau of Statistics. According to SBM Intelligence, a geopolitical advisory based in Lagos, inflation has made even staple foods like jollof rice, a popular food, out of reach. Similarly, electricity tariffs have increased by 40 percent and fuel now costs 700 naira ($0.84) per litre (0.26 gallons). Transport and other amenities are increasingly out of reach for workers, too.

Tunde Taiwo* [name changed for fear of retribution], 31, is a sergeant at Lagos Neighbourhood Safety Corps, a security agency created by the state government to tackle urban crime. His work often puts him in danger. Last year, he was overpowered and brutalised by louts.

When his 50,000 naira ($59.70) pre-tax October salary came, three loan companies shared in it.

“It is not like I want the loans but when your family is suffering, what will you do? What is the essence of doing a government job when you cannot even feed your family?” Taiwo, who has been working for the government for five years, said. And this is why he is unfazed by temporary increments.

“They should give us a liveable wage that we can depend on, not minimum wage, the way we are living is not up to any standard of living,” he said.

Experts say the government may have missed the window for introducing safety nets as it has squandered years of booms. “The government needs to go for the low-hanging fruit that can target the vulnerable and the most affected in the country like food and other sources of energy that can have immediate impact,” Nwankpa said.

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