A recent analysis by The Guardian indicates that a single worker in any of Nigeria's urban centres would need to earn a minimum of ₦372,300 monthly to reasonably survive. This amount is considered a cost-reflective salary, stripped of social life spending, skills development budget, guest entertainment, family support, and other frivolities, but includes a modest savings to reasonably cover immediate costs in case of job loss.
The cost of living in Nigeria has increased significantly over the past three years, largely due to the removal of the fuel subsidy and naira depreciation following the foreign exchange market liberalisation. The price of premium motor spirit (PMS) rose by 600 per cent, exacerbating the financial strain on citizens. As a result, labour leaders are demanding a higher minimum wage, with some proposing as much as ₦1,000,000, while employers are calling for a fair new wage floor setting that considers labour productivity.
The Guardian's ideal wage model captures key personal expenditure lines, including accommodation, food, daily commuting, health, personal care, clothing, and a modest contingency savings. Housing, which accounts for about 34 per cent of the total cost, requires ₦125,000 to be set aside monthly. Data from rental platforms indicates that the cost of a room apartment across Nigeria ranges between ₦500,000 and ₦2.5 million, depending on the city and location.
In addition to housing costs, daily commuting expenses average ₦4,500, with a total budget of ₦99,000 required for commuting to and fro, assuming 22 workdays in a month. The National Bureau of Statistics' recent data put the average cost of a healthy meal per adult per day at ₦1,589, translating to a monthly average of ₦47,670. This is approximately 68 per cent of the current minimum wage, highlighting the financial strain on workers.
Other essential expenses, such as health insurance, utilities, personal care, and clothing, also contribute to the overall cost of living. A young worker may need to budget ₦3,958 monthly for private sector-managed health insurance schemes, while utilities and personal care costs are estimated at ₦15,000 and ₦20,000, respectively. Furthermore, consultants recommend that about 15 per cent of monthly salaries be set aside for clothing.
The analysis also suggests that workers need to maintain minimum contingency savings for temporary out-of-job eventualities. The Guardian assumes a six-month adjusted cost of living equivalent savings in three years, which translates to ₦32,326 monthly. This comes as the battle for the next national minimum wage has begun, with inflation and a sharply weakened naira setting the stage for contentious wage negotiations.
Preliminary discussions have been held on the next round of national minimum wage negotiations, with both parties acknowledging the need for early consultations. The goal is to increase the minimum wage substantially to allow workers to have a meaningful and dignified life. At the last wage negotiation, organised labour proposed ₦615,000 to ₦1 million for a hypothetical six-member family, using various cost of living parameters.
Key points
- The cost-reflective monthly salary for Nigerian workers stands at ₦372,000.
- Housing and transport account for 60 per cent of the cost.
- The 2027 election campaign is expected to shape the wage debate.
