In a recent disclosure, Dr. Tope Fasua, Special Adviser to the President of the Federal Republic of Nigeria on Economic Affairs, highlighted the limited reach of the National Labour Congress (NLC) over Nigeria’s workforce. Speaking at Nairametrics’ macroeconomic outlook for the third quarter of 2024, Fasua revealed that only about 7-8% of the working population in Nigeria is under wage employment, a sector primarily controlled by the NLC. This revelation underscores the significant number of Nigerians who work in unstructured environments, often outside formal wage employment frameworks.
Fasua emphasized that the government’s primary focus is on those not under wage employment. He pointed out that 88% of Nigerians are engaged in informal sectors such as hustling and farming, which fall outside the structured employment regulated by the NLC. This sector includes a vast number of individuals who operate in what Fasua described as "unstructured environments."
"The issue of minimum wage and all these things about employment goes beyond NLC. The NLC controls about 7-8% of the working population in Nigeria. 88% of Nigerians work in unstructured environments, hustling, and farming. The concern of the government is that big number," Fasua stated.
Amid ongoing negotiations between the government and the labour union, Fasua assured that President Bola Tinubu is open to making concessions, particularly in light of the profound economic reforms the country is undergoing. These reforms have heightened the need for adjustments in wage structures.
"I think they are getting to a certain point where there will be an agreement, and I see that the president is also ready to make concessions as well. Everybody knows that when you do the kind of very profound reforms that we have done, the wage curve will shift outwards, and everybody needs to earn a little bit more," Fasua added.
Fasua also expressed concerns regarding the uniformity of the minimum wage across various states, given the differing cost of living levels. This concern contrasts with the stance of the NLC, which opposes decentralizing minimum wage negotiations. The union insists on a standardized minimum wage across all states.
The President of the NLC, Joe Ajaero, reaffirmed the union's demand for a minimum wage of N250,000 following a meeting with President Tinubu. This demand reflects the union's commitment to securing a living wage for workers in the face of economic challenges.
Recent data from the National Bureau of Statistics (NBS) reveals a dynamic shift in Nigeria's labour market. As of the third quarter of 2023, 87% of Nigerians within the working-age bracket have ventured into self-employment, marking a slight decrease from the 88% recorded in the previous quarter. This shift suggests that some self-employed individuals are transitioning to salaried roles or facing the unfortunate closure of their enterprises.
A report by Moniepoint provides further insight into the motivations behind this shift. According to the 2024 informal economy report, based on data from over two million businesses, 51.6% of business owners in Nigeria’s informal sector started their ventures due to unemployment. Additionally, 35.9% of individuals turned to entrepreneurship because their formal employment did not provide sufficient income.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has highlighted that about 81% of Nigerians in the employment pool are not engaged in any productive sector of the economy. This statistic underscores the challenges in Nigeria's labour market, where a significant portion of the workforce remains underutilized.
An African Development Bank (AfDB) report further elaborates on these challenges, noting that approximately 34.3% of Nigerian workers aged 15 and older are considered working poor, living below the poverty line despite being employed. The Nigeria Country Diagnostic Note (CDN) 2023 attributes this to low-skilled and low-wage jobs that trap many workers in poverty.
World Bank economists have also raised concerns about the effectiveness of retail and wholesale trade jobs in alleviating poverty in Nigeria. These positions, often seen as a fallback for the unemployed, do not provide a reliable pathway out of poverty, exacerbating the country's escalating poverty crisis.
Dr. Tope Fasua's remarks shed light on the complex dynamics of Nigeria's labour market, highlighting the limited reach of the NLC and the vast majority of Nigerians working in unstructured environments. The government's focus on these informal sectors and ongoing negotiations for higher wages reflect the broader economic reforms aimed at addressing the challenges faced by Nigeria's workforce. As the country navigates these reforms, the need for a comprehensive approach to wage standardization and employment opportunities remains critical to ensuring a more inclusive and equitable labour market.
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