Organized Private Sector Accepts ₦60,000 Minimum Wage Proposal Amid Economic Challenges

The organized private sector has agreed to the Federal Government’s proposal for a new minimum wage of ₦60,000.

Ajayi Kadri, the Director-General of the Manufacturing Association of Nigeria, confirmed this development during a recent interview. He emphasized that the private sector is currently facing challenges related to the economy, infrastructure, and security, and cannot afford to pay more than the proposed minimum wage at this time.

Ajayi pointed out that the ongoing negotiations between the government, the private sector, and labor unions are focused on setting a minimum wage, not a living wage. This represents the lowest possible payment for any worker in the country.

He further stressed the significant economic challenges faced by both labor and private businesses, making it very difficult to meet the wage demands of labor unions.

“This is a very difficult time for anyone to negotiate a minimum wage. From the perspectives of the government, labor, and the organized private sector, we operate in an environment where there is a general understanding that the macroeconomic conditions are unfavorable. Even the global economy is experiencing instability, along with the impacts of necessary government reforms.

“From the beginning of the minimum wage negotiations, it has been clear to the tripartite group—the government, labor, and the organized private sector—that we are dealing with a challenging situation.

“Both the organized private sector and the government have offered ₦60,000 as the minimum wage. It is important to understand that we are discussing the minimum wage, which some call the walk-in wage. This is the amount we will pay the lowest-paid workers in the country. We are negotiating a minimum wage, not a living wage,” Ajayi said during a Channels Television program on Saturday.

Ajayi revealed that both the government and the private sector face significant obstacles in meeting the proposed ₦419,000 living wage demand.

He noted that the private sector, in particular, is struggling with economic difficulties and inflation, making it unfeasible to meet such a high wage.

Furthermore, he emphasized that the current period is not conducive for organized labor to engage in discussions about a new minimum wage. Instead, they should work together with other parties to strengthen the economy.

“All of us in the tripartite group—the government, labor, and the private sector—understand that we are operating in a very difficult environment. The government itself realizes that it has limited capacity to pay. The private sector is constrained by economic, infrastructure, and security challenges, so we are also limited in what we can pay.

“Labor, on its part, is under intense pressure from its members to ask for a higher wage because inflation has skyrocketed and the operating environment is tough.”
“Throughout the negotiation process, we emphasized that this is not the right time to negotiate the minimum wage. Now is the time for us to come together with the government and work on growing the economy so we can create a larger economic pie that everyone can share,” the director general added.

He urged organized labor to reconsider their decision to initiate a nationwide strike, stressing that abandoning negotiations in favor of a strike would not be beneficial.

He highlighted the importance of organized labor reconsidering their decision to go on strike, noting that rejecting the N60,000 offer from the government and private sector was unfortunate.

“We cannot afford to cripple the economy when what we need to do is continue to build it. I believe President Tinubu made it clear when he took office that these would not be easy times, and we need to tighten our belts to revive an economy that has been seriously damaged,” Ajayi-Kadir said.

He added: “Of course, the government needs to demonstrate leadership, sensitivity, and awareness of the current situation. Government spending, decision-making, and the cost of governance all need to be considered.

“I think labor is concerned that they are bearing the brunt of the economic hardship, but we need to engage in dialogue. Walking out of the process and declaring a strike will not solve this issue.”

It was reported earlier that labor unions announced a nationwide strike starting Friday with no specified end date due to the Federal Government’s rejection of the proposed N60,000 minimum wage.

They stated that the strike was initiated because the Federal Government failed to finalize all discussions regarding a new minimum wage by the end of May, as previously appealed.