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Tinubu’s Fuel Subsidy Removal: A Year Of Economy Turmoil (Part 9), By Erasmus Ikhide

I have hazarded a thought-provoking analysis of the evolution of Nigeria’s minimum wage and its purchasing power over the years — where I compared the rising cost of living and the US dollar exchange rate — scientifically. In this part, I’m highlighting the significant decline in the value of the minimum wage, from being equivalent to US$208 in 1981 to approximately US$20 today.

Considering the current economic situation and the costs of basic necessities like food, housing, transportation, healthcare, and education, a reasonable and sustainable minimum living wage for a Nigerian worker would likely need to be significantly higher than the current ₦300,00 (approximately US$200).

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In the Second Republic of Shehu Shagari’s Presidency between 1981 and 1983, Nigeria first national minimum wage became ₦125 per month, while petrol was sold at 20kobo per litre and US$1 = 60kobo. In 1990, minimum wage was ₦250, while petrol was sold at ₦20 per litre; and a 50kg bag of rice was ₦400 and US$1 = ₦7.40k. Fast forward to 1999, minimum wage was pegged at ₦3,500; while petrol was still ₦20 per litre; and a 50kg bag of rice was ₦2,500 and US$1 = ₦22.

Then in 2000, new minimum wage became ₦5,500 and ₦7,500 for different categories of federal workers, while petrol was sold at ₦30; and a 50kg bag of rice was still ₦2,500 and US$1 = ₦86. Again, in 2011 a new national minimum wage became ₦18,000, while petrol was fixed at ₦65; and a 50kg bag of rice was ₦12,000 and US$1 = ₦165.

In 2019, new national minimum wage became N30,000 monthly, while petrol was sold at ₦145; a 50kg bag of rice was ₦19,500 and US$1 = ₦305. And in 2024, the ongoing discussions about a new minimum wage, while Petrol is sold at ₦720 (officially ₦620), and a 50kg bag of rice is ₦85,000 and US$1 = ₦1,480.

In restrospect, the minimum wage of 1981 (₦125) was roughly US$208. At today’s exchange rate of US$1 = ₦1,480, that ₦125 is equivalent to ₦307,840. So, the minimum wage in 1981 was over 10 times bigger than the current minimum wage of ₦30,000 which is the equivalent of about US$20. Specifically speaking, Nigerian, its people and economy have all collectively gone down 10 times beneath the surface of human capital and development indexes!

As at today, human development index (HDI) of life expectancy, education, income, of gross domestic product (GDP), of economic output and growth, sustainable development goals (SDG) index, tracks progress towards the United Nations’ 17 SDGs, global hunger index (GHI), of food security and nutrition, gender inequality index (GII), of gender-based disparities in health, education, and economic opportunities, of corruption perceptions index (CPI), of perceived levels of corruption in countries, of ease of doing business index (EDBI), of the simplicity and efficiency of business regulations, of environmental performance index (EPI), of evaluates environmental health and sustainability are less than 10 percents.

The Nigerian worker has to eat, drink, have shelter, clothe self, transport self, settle bills/subscribe for services (DSTV, MTN, etc), access healthcare, provide for dependants (feeding, shelter, clothing, school fees, healthcare, etc.) etc. The Nigerian political officer (elected or appointed) takes life for granted because he scoops from the state treasury like from his domestic soup pot.

What can be a Nigerian worker’s reasonable and sustainable minimum living wage, given country’s economic situation and the precarious existence of average workers in today’s Nigeria?
Some possible considerations for determining a more realistic minimum wage could include, but not limited to the cost of a basket of essential goods and services; the average cost of housing, food, and transportation, the minimum required to support a family of four, a percentage of the country’s GDP per capita, as well as benchmarks from other countries with similar economies.

The trap of penchant and urge to satisfy over pampered economy vampires like Alhaji Aliko Dangote brought President Tinubu down into the swathes of economy stagnation. “It’s the predictable consequence of the pigheaded pursuit of a ruinous policy of subsidy removal from petrol, the lifeblood of Nigeria”, one analyst said about Tinubu’s comeuppance economy tragedy.

Without plans and vision, President Bola Ahmed Tinubu crashed his way into Aso Rock before he realized the meaning of managing multiethnic and monolistic economy, buoyed and sullen by mafiadon. Tinubu’s and Nigerians’ punishment is due to his arrogance — sense of entitlement and his disregard for superior economy opinions — held differently from the fixation of “it is my turn to rule”.

Erasmus Ikhide contributed this piece via: ikhideluckyerasmus@gmail.com

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