Kingsley Moghalu.
Former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu has said that Nigeria’s current level of productivity cannot support a minimum wage between N400,000 and N500,000 as demanded by the organised Labour.
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Instead, Moghalu recommended a minimum wage between N75,000 and N100,000.
Moghalu made this known on his official X handle on Tuesday.
The organised Labour comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) had initially proposed N615,000 as new minimum wage and later slashed it down to N494,000 citing inflation and the prevailing economic hardship in the country.
Following the insistence of the Federal Government and organised Private Sector on an offer of N60,000, as the new national minimum wage, a sum from the proposed demands of the organised Labour, the latter had declared a nationwide strike which attracted mass compliance between Monday and Tuesday.
On Monday, June 3, the Federal Government and the organised Labour agreed to fix a new minimum wage that will be “above N60,000”.
In reaction to the development, Moghalu said the fundamental point in the national minimum wage debate is that the country has little or no productivity in the economy.
In his handle, — Kingsley Moghalu OON (@MoghaluKingsley), he said on Tuesday, “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.”
He further explained that productivity can be achieved by human capital development and electricity, amongst others.
“In fact, speaking about productivity, how productive is an average Nigerian worker? How skilled is he or she, and thus how much value does he or she create,” he said.
“I know we are all upset at our insensitive political class, who do not care about the masses and only for themselves. But the economics of it all is far more complex.
“Sadly, it is quite obvious that the political will to reduce the waste in governance does not exist,” he said.
Responding to a question by an X user on how the economy can be more productive, Moghalu replied, “Human capital development. Skills that create value addition which is economically quantifiable. Wealth creation and profitability increases. Wages go up naturally. And, of course, the almighty ELECTRICITY.”