So President Buhari has finally signed the minimum wage increase into law. The minimum wage has been increased from N18,000 to N30,000. But is it enough? Let’s ask you the question, dear reader, can you survive on N30,000 a month?
Take an individual that lives in Ajegunle and commutes to Victoria Island to work and earns N30,000 monthly.
- A one-bedroom flat in Ajegunle goes for about N220k a year or N18,333 monthly
- Transport from Ajegunle to VI is N600 roundtrip or N12k monthly excluding weekends
- Conservative monthly food bill is N13,000 (N15k bag of rice lasts two months so N7.5k monthly + N2.5k for Garri and N3k for tomatoes to make stew sans other ingredients)
- PHCN bill is N3k monthly
How much is left?
This hypothetical individual is in the hole to the tune of N16k. So if you add the deficit to the minimum wage, you’d need at least N46k to cover basic needs. Note that clothing and other miscellaneous expenses haven’t been added.
There’s also the amount of the minimum wage in dollar terms. Using official rates from the Central bank, the Naira has depreciated in value by 51%. Back in 2010 when the minimum wage was N18k, the official rate was N150/$ so your N18k was worth $120. Today, the N30k minimum wage is worth $98 at N305/$. Keep in mind, these are CBN rates. The parallel market (black market) rate is N365. Using that, your N30k is worth just $82.
Bottom line: Nigerians are poorer now than in 2010. The Government’s minimum wage increases are not keeping up with cost-of-living realities. Oh by the way, our dear Federal Government of Nigeria hasn’t even figured out a way to pay for this minimum wage increase.
Buhari has signed the bill. It’s time to cross the payment bridge since he’s got us there.