NECA Insists On A Minimum Wage That Would Sustain Job Creation And Productivity

By Chinedu Echianu

 As the ongoing negotiations on a new national minimum wage for Nigeria Continues, the Nigeria Employers' Consultative Forum (NECA) has urged members of the Tripartite Committee on National Minimum Wage to prioritize job creation and job security in view of the worrisome and increasing rate of unemployment.

 The Association affirmed that productivity should be a key driver of higher wages. Speaking in Lagos, the Director-General of the Nigeria Employers’ Consultative Association (NECA) and spokesperson of the Organized Private Sector in the Committee, Adewale-Smatt Oyerinde said; “it is important to note that what the Committee was constituted to negotiate is a new national minimum wage.

 A minimum (not maximum) that could be termed the “floor” wage, below which no employer should pay. Employee should be able to navigate their paths toward higher wages through increased productivity and value addition.”

While explaining the current realities of the Organized Private Sector of Nigeria, the Director-General averred that; “in the last three years, hundreds of companies have either exited the country, shut down or changed business model.

These companies included Jubilee Syringe Manufacturing (JSM), Proctor & Gamble, Unilever Nigeria Plc, PZ Nigeria Plc, GSK Nigeria Plc, Sanofi Pharmaceuticals, Bolt Food, Nampak, Microsoft, Jumia Food, Equinor (oil & gas), Mayor Biscuits Company Limited, Greif Nigeria among others, with many other Multinational companies declaring over N1trillion in combined losses. According to the Manufacturing Association of Nigeria (MAN), about 767 manufacturing companies were shut down and over 335 experienced distress in the country in the last 3 years.

In addition to this is a bourgeoning N350 billion worth of unsold inventory of manufactured goods of which the same fate is faced by Small and Medium Scale industries (SMEs). The Private Sector is on the precipice of collapse with massive consequences for jobs”. Urging the National Minimum Wage Committee to refocus its effort on protecting jobs, boosting the capacity of the Private Sector to create more jobs and ensuring sustainability and ability to pay, Mr. Adewale-Smatt stated further; “according to the National Bureau of Statistics, the combined rate of unemployment and time-related underemployment as a share of the labour force population (LU2) increased to 17.3% in Q3 2023 from 15.5% in Q2 2023.

In specific terms, the unemployment rate increased significantly in Q3 2023 at 5.0%. With these figures, more efforts should be concentrated on keeping more people in employment while Government continues to implement its planned interventions in transportation, food security and general macro-economic stability.”

Concluding his remarks, the Director-General noted that “with Organized businesses declaring over N1 trillion in combined losses and many shutting down their businesses for different reasons, while others are relocating to other climes, the ability to pay the prevailing N30,000 was already compromised. It will be practically impossible to guarantee enterprise sustainability and job security with the current demands of Organized Labour.

Notwithstanding ongoing challenges, made worse by rising interest rates, astronomical logistics cost, increasing energy tariff and multiple taxes, levies and fees, the private sector remained committed to the N57,000.00, which represents ninety-percent (90%) increase in the National Minimum Wage and will continue to support the welfare of workers and the protection of their jobs, which can only be guaranteed by the survival of the enterprise”.