Economist says N500,000 minimum wage demand could fuel inflation in Nigeria
Economist Paul Alaje says Nigeria’s N70,000 minimum wage is inadequate but argues that an immediate increase to N500,000 could intensify inflation without higher production. Speaking during a public-sector warning strike, he proposed N125,000 to N150,000 as a more appropriate wage and urged action on healthcare, education, energy and productivity.
Economist Paul Alaje has described Nigerian workers’ demand for a N500,000 minimum wage as unrealistic under current economic conditions, while acknowledging that the existing N70,000 wage is insufficient for a decent standard of living. Speaking on Arise Television’s News Night on Friday, Mr. Alaje said an immediate rise to N500,000 could increase inflation by putting more money into circulation without a corresponding increase in production.
He said the central issue should be the purchasing power of wages rather than the size of the nominal figure. His comments came during a three-day warning strike by public-sector workers under the Joint National Public Service Negotiating Council. The strike ran from October 2 to 4.
Workers are demanding a new minimum wage, immediate salary increases and a reduction in petrol prices to N500 a litre. Mr. Alaje said he had warned labour representatives in 2024 that they might regret settling for N70,000.
He questioned whether workers earning that amount could pay rent, feed their families and educate their children in major Nigerian cities. He estimated that N125,000 to N150,000 would be more appropriate if adjusted for inflation. He also advocated affordable healthcare and primary education, saying cheaper essential services would increase workers’ real disposable income.
The economist said petrol prices had risen substantially since subsidy removal in 2023, reaching about N1,450 a litre at the time of his remarks. He attributed the increase not only to subsidy removal but also to exchange-rate depreciation, inflation and global pressures. He argued that government support should strengthen domestic production rather than recreate an import-dependent subsidy system.
Mr. Alaje identified electricity supply as a major constraint on growth and said sustainable wage increases would require greater productivity. He also questioned whether reported economic growth was improving household welfare, citing poverty and employment as more meaningful measures than growth figures alone.
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