Private sector faults N100,000 minimum wage proposal

Members of the organised private sector have cautioned against expecting private sector employers to automatically adopt the N100,000 minimum wage being implemented by some state governments, warning that many businesses are already struggling with rising operating costs and shrinking profit margins.

 

The business groups said while some large firms and thriving sectors of the economy could afford wages above N100,000, most small and medium-sized enterprises (SMEs) were battling inflation, high energy costs, weak consumer demand and increasing production expenses.

 

Their concerns follow growing discussions around a possible review of the national minimum wage and the decision by some state governments to raise workers’ salaries to N100,000.

 

President of the Lagos Chamber of Commerce and Industry (LCCI), Leye Kupoluyi, said private sector employers should not be compelled to pay the same wage level as governments if their financial realities do not permit it.

 

According to him, businesses are currently burdened by multiple economic challenges and need greater government support through improved infrastructure, energy supply and industrial policies.

 

Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale Oyerinde, said although the proposed increase reflects current economic realities, it cannot automatically become binding on private sector employers.

 

He noted that national minimum wage reviews are traditionally determined through tripartite negotiations involving government, employers and labour unions, in line with International Labour Organisation (ILO) standards.

 

Oyerinde argued that reducing the cost of living would have a greater impact on workers’ welfare than what he described as arbitrary wage increases without supporting economic reforms.

 

National Vice President of the National Association of Small-Scale Industrialists (NASSI), Segun Kuti-George, said the proposed wage level may be suitable for public sector workers but is unrealistic for many businesses.

 

He noted that while state governments rely on public revenues, SMEs are already under pressure from increased production costs and declining profitability.

 

Similarly, President of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said many SMEs lack the financial capacity to immediately implement a N100,000 minimum wage.

 

He explained that larger companies may be able to adjust their wage structures to retain skilled workers, but many smaller businesses are struggling to survive amid inflation and rising operational expenses.

 

Egbesola urged the government to focus on reducing the cost of doing business, saying a more supportive economic environment would enable employers to pay higher wages sustainably while preserving jobs.

 

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said wage structures vary significantly across industries, company sizes and locations.

 

He noted that sectors such as banking, oil and gas, and information technology already pay salaries well above N100,000, with some organisations offering entry-level wages of between N150,000 and N200,000.

 

However, he said conditions remain difficult in sectors such as manufacturing, agriculture, retail, education and hospitality, where many businesses continue to grapple with rising costs and weak consumer spending.

 

Yusuf added that many enterprises are still struggling to comply with the current N70,000 minimum wage, particularly small businesses operating in rural areas with limited revenue opportunities.

 

The business leaders unanimously maintained that improving the operating environment and reducing production costs would be a more sustainable way of improving workers’ welfare than imposing wage levels many employers may be unable to sustain.