N70,000 Minimum Wage Cannot Lift Nigerians Out of Poverty – US Report
 |
N70,000 Minimum Wage Cannot Lift Nigerians Out of Poverty – US Report |
A US report reveals that Nigeria’s new N70,000 minimum wage is inadequate to reduce poverty, citing weak enforcement and inflation pressures.
US Report Questions Effectiveness of Nigeria’s Minimum Wage
The United States government has raised concerns over the sustainability of Nigeria’s recently approved N70,000 national minimum wage, warning that the benchmark is too low to lift millions of citizens out of poverty.
According to the 2024 Country Reports on Human Rights Practices, released on August 12, 2025, by the US Department of State’s Bureau of Democracy, Human Rights, and Labour, the current wage translates to only $47.90 per month at an exchange rate of over ₦1,500 to the dollar. The report highlights that the persistent depreciation of the naira continues to erode the real value of workers’ earnings.
Weak Enforcement of Minimum Wage Laws
While the National Minimum Wage (Amendment) Act 2024 doubled wages from the previous level, the US assessment noted that enforcement across the country remains inconsistent and weak.
Key challenges identified include:
- Several states refusing to implement the wage due to financial constraints.
- The law applying only to firms with 25 or more full-time employees.
- Exclusion of seasonal agricultural workers, part-time staff, and commission-based employees.
- Limited oversight, as Nigeria’s labour inspectorate is too small to monitor compliance effectively.
These gaps leave millions of Nigerian workers—especially those in vulnerable sectors—outside the protection of wage laws.
For deeper context on Nigeria’s economic reforms, see this World Bank analysis on Nigeria’s poverty trends.
Impact of Informal Economy and Rising Inflation
The report also underscored that 70–80% of Nigeria’s workforce operates within the informal economy. In this sector, wage, hour, and safety laws are largely unenforced, exposing workers to low pay and exploitation.
Adding to the challenge, Nigeria’s ongoing economic reforms—such as fuel subsidy removal and exchange rate unification—have intensified inflation. The soaring cost of food, transport, and basic goods has drastically reduced the purchasing power of workers, making the N70,000 minimum wage insufficient to cover living expenses.
For example, with inflation consistently above 25%, the average Nigerian household spends the majority of its income on food, housing, and transportation—leaving little room for savings or healthcare.
Broader Implications for Nigerian Workers
The US report paints a troubling picture of labour conditions in Nigeria, where many citizens struggle to make ends meet despite wage increases. Unless reforms are paired with stronger enforcement mechanisms and measures to stabilize the economy, workers will remain trapped in a cycle of low income and high living costs.
This raises urgent policy questions:
- Should Nigeria restructure labour laws to cover part-time and informal workers?
- How can the government strengthen the capacity of labour inspectors?
- Can targeted social safety nets offset the inflationary effects of economic reforms?
Minimum Wage Alone is Not Enough
The N70,000 minimum wage may represent progress on paper, but without effective enforcement and broader structural reforms, it remains inadequate to lift Nigerians out of poverty. As inflation continues to erode earnings and the informal sector dominates the workforce, Nigeria faces a critical challenge in ensuring fair pay and sustainable livelihoods.
The findings of the US report serve as a reminder that wage laws must be paired with economic stability, stronger institutions, and policies that protect all categories of workers.
