Private Sector Rejects Calls for N100,000 Minimum Wage, Warns SMEs Are Struggling
Business leaders say many small and medium-sized enterprises cannot sustain a N100,000 minimum wage amid rising production costs, inflation and weak consumer demand.
Private Sector Rejects Calls for N100,000 Minimum Wage, Warns SMEs Are Struggling
Members of Nigeria’s organised private sector have warned that businesses should not be compelled to adopt a N100,000 minimum wage, arguing that many employers are already struggling with rising operational costs and shrinking profit margins.
The caution follows growing discussions around a possible review of the national minimum wage and decisions by some state governments to raise workers’ salaries to N100,000.
Business leaders said while some large corporations may be able to absorb higher wage costs, thousands of small and medium-sized enterprises are battling inflation, energy costs, declining consumer demand and increased production expenses.
President of the Lagos Chamber of Commerce and Industry (LCCI), Leye Kupoluyi, stated that private sector employers should not be forced to match wage levels approved by governments if their businesses cannot sustain such payments.
According to him, many companies are already facing multiple economic challenges that continue to increase the cost of doing business across the country.
Kupoluyi urged government authorities to focus on addressing key economic issues, including infrastructure deficits, fuel supply challenges and support for strategic industries.
The Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale Oyerinde, also noted that although the proposed increase reflects current economic realities, it cannot automatically become binding on private sector employers.
He explained that any nationally binding minimum wage must emerge through established tripartite negotiations involving government, labour unions and employers in line with International Labour Organisation standards.
Oyerinde argued that reducing the cost of living would provide greater relief for workers than imposing wage increases that many businesses may be unable to sustain.
Similarly, National Vice President of the National Association of Small-Scale Industrialists, Segun Kuti-George, said the proposed wage level may be appropriate for public sector workers but remains unrealistic for many private businesses.
He noted that many Micro, Small and Medium Enterprises are already dealing with rising production costs and declining profits.
President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, described the move by some state governments as commendable but warned that many SMEs lack the financial capacity to immediately implement a N100,000 minimum wage.
According to him, larger companies may be able to adjust salaries to retain skilled workers, but smaller businesses are still struggling with inflation, energy costs and weak consumer spending.
Egbesola called on government authorities to prioritise policies that reduce the cost of doing business, saying such measures would enable employers to increase wages sustainably without threatening jobs.
Also speaking, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said wage realities differ across industries and business sizes.
He noted that sectors such as banking, oil and gas, and information technology already pay salaries far above N100,000, with some firms offering entry-level wages of between N150,000 and N200,000.
However, Yusuf explained that businesses in manufacturing, agriculture, education, hospitality and retail continue to face severe economic pressures, making compliance difficult even with the current N70,000 minimum wage.
He warned that businesses operating in rural communities would face even greater challenges due to lower purchasing power and limited revenue opportunities.
The business leaders unanimously maintained that improving Nigeria’s business environment, reducing production costs and stabilising the economy would be more effective in improving workers’ welfare than introducing wage obligations that many employers cannot sustain.
Contact: justnewsonly1@gmail.com
