The organised private sector has opposed suggestions that businesses should automatically adopt a N100,000 minimum wage, warning that many employers are already struggling to keep their operations afloat amid worsening economic conditions.
Business leaders said while some state governments may have the financial capacity to implement the wage increase for public servants, many private companies, especially small and medium-sized enterprises, cannot sustain such a move under current realities.
The position comes amid growing discussions around workers’ welfare following decisions by some state governments to raise the minimum wage to N100,000.
Stakeholders in the private sector argued that wage increases should be based on the financial strength of individual businesses rather than being imposed across board. They maintained that many employers are battling rising inflation, energy costs, weak consumer spending and other economic pressures that have significantly increased the cost of doing business.
President of the Lagos Chamber of Commerce and Industry (LCCI), Leye Kupoluyi, said the private sector should not be compelled to pay wages beyond what businesses can realistically afford.
According to him, “National minimum wage does not necessarily mean private sector operators must pay their workers the same level if they cannot afford such a level at the time of introduction. This point is based on too many cost burdens that businesses are coping with at this time.”
Kupoluyi noted that businesses continue to face several challenges, including infrastructure deficits, logistics difficulties and energy-related expenses. He stressed that government intervention should focus more on addressing the factors driving up production costs.
He also expressed concern over the country’s fiscal situation, warning that increasing debt obligations could further affect infrastructure development and economic growth.
On his part, the Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale Oyerinde, acknowledged that the demand for higher wages reflects the hardship many Nigerians are facing. However, he insisted that any national wage review must follow established procedures involving negotiations among all relevant stakeholders.
“We commend the state governments for proposing the increase of the minimum wage to N100,000. This seems plausible in view of the biting economic situation, made worse by the increasing cost of energy, etc.
However, it should be strongly noted that the process for arriving at a National Minimum Wage is rooted in widely acclaimed tripartite negotiations and consultation and not just political statements, without any empirical data to back up the quantum of increase,” he said.
Oyerinde added that agreements reached between governments and labour unions cannot automatically become binding on private sector employers without broader consultations.
He further argued that reducing the cost of living would provide greater relief for workers than wage increases that many employers may be unable to sustain.
The National Vice President of the National Association of Small-Scale Industrialists, Segun Kuti-George, also expressed reservations over the proposal.
According to him, while the wage increase may be achievable for government workers whose salaries are funded from public revenues, many private businesses are operating under severe financial pressure.
“Whereas it is good for the public service, the private sector should not be constrained to follow suit. It is desirable but not feasible for the private sector. Interestingly, the governors are getting their funds from the national commonwealth. MSMEs are already groaning under the burden of increased production costs and the consequential decline in the bottom line (profit),” he said.
Similarly, President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said the capacity to implement a N100,000 minimum wage varies widely across different businesses.
He noted that larger corporations may be able to absorb the additional costs, but many small enterprises are already struggling to survive due to inflation, rising utility bills and declining consumer purchasing power.
“The move by some state governments to raise the minimum wage to N100,000 is commendable and reflects the reality of the rising cost of living. However, whether the private sector can match this level depends largely on the size, capacity, and financial health of individual businesses,” Egbesola said.
He warned that forcing businesses to implement wage increases without addressing the broader economic environment could lead to job losses and business closures.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, also said wage structures in the private sector differ significantly depending on industry, company size and location.
He explained that sectors such as banking, oil and gas, and information technology already pay salaries far above the proposed figure, with some firms offering entry-level wages of N150,000 or more.
However, Yusuf said the reality is different in sectors such as manufacturing, agriculture, hospitality, retail and education, where many operators are struggling to cope with rising operating expenses.
“For many small businesses, it is a struggle to even keep the business afloat. That is the reality,” Yusuf said.
He noted that a significant number of employers are still finding it difficult to fully comply with the current N70,000 minimum wage because of soaring energy costs and weak market conditions.
“Many of the small businesses will have to struggle to be able to meet this N100,000. Even the N70,000, many of them are still struggling to pay it because they can’t give what they don’t have,” he added.
Yusuf further warned that businesses operating in rural communities could face even greater difficulties because of lower purchasing power and limited revenue opportunities.
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