NECA’s Adewale-Smatt Oyerinde has warned that insisting on N400,000 minimum wage could collapse organised businesses, causing massive job losses.
Director-General of Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, has urged representatives of organised labour to embrace the proposed N57,000 new minimum wage or be prepared to serve as the undertaker of organised business by insisting on N400,000 as minimum wage.
The N400,000 placed on the negotiation table by organised labour represents 1,233 percentage increase from the current N30,000 minimum wage.
Oyerinde, who is also spokesperson of the Organised Private Sector (OPS) in the National Minimum Negotiation Committee, said the proposed N57,000 represented 90 percent increase over the current N30,000 minimum wage. He reminded labour that no member of OPS was making 90 percent profit, as a large number of them were booking losses and shutting down.
The NECA director-general told THISDAY at the weekend, “The circumstances and situation of the organised businesses have not improved significantly to accommodate the 90 percent increase the OPS offered.
“The organised businesses have offered 90 percent increase and the government has increased its offer from N47,000 to N57,000.
“But labour is still insisting on N400,000 minimum wage, which we believe is desirable and within the right of labour to ask, but is quite unsustainable for the organised business because it will lead to the death of many organisations. And we cannot allow either labour or government to become undertakers of the organised businesses.”
In a press statement titled, “National ‘Minimum’ Wage Negotiation: Job Security and Creation should be Prioritised,” which he issued on Sunday, Oyerinde urged the wage negotiation committee to prioritise job creation and job security in view of the prevailing worrisome and increasing rate of unemployment in Nigeria. He added that productivity should be the key driver of higher wages.
The director general of NECA stated, “It is important to note that what the committee was constituted to negotiate is a new national minimum (not maximum) that could be termed the ‘floor’ wage, below which no employer should pay.”
He said, “With organised businesses declaring over N1 trillion in combined losses and many shutting down their businesses for different reasons, while others are relocating to other climes, it will be practically impossible to guarantee enterprise sustainability and job security with the current demands of organised labour.
“Notwithstanding ongoing challenges, made worse by rising interest rates, astronomical logistics cost, increasing energy tariff and multiple taxes, levies and fees, the private sector remained committed to the 90 percent increase in the National Minimum Wage and will continue to support the welfare of workers and the protection of their jobs, which can only be guaranteed by the survival of the enterprise.”
While explaining the current economic realities, Oyerinde said, “In the last three years, hundreds of companies either exited the nation, shut down or changed their business model.
“These companies included Jubilee Syringe Manufacturing (JSM), Procter & Gamble, Unilever Nigeria Plc, PZ Nigeria Plc, GSK Nigeria Plc, Sanofi Pharmaceuticals, Bolt Food, Nampak, Microsoft, Jumia Food, Equinor (oil & gas), Mayor Biscuits Company Limited, and Greif Nigeria, among others, with many other multinational companies declaring over N1 trillion in combined losses.
“According to the Manufacturing Association of Nigeria (MAN), about 767 manufacturing companies were shut down and over 335 experienced distresses in the country in the past three years.
“In addition to this is a bourgeoning N350 billion goods, which were unsold. The same fate is faced by Small and Medium Scale industries (SMEs). The private sector is on the precipice of collapse, with massive consequences for jobs.”
Oyerinde urged the National Minimum Wage Committee to refocus its effort on protecting jobs, boosting the capacity of the private sector to create more jobs, and ensuring sustainability and ability to pay.
He revealed, “According to the National Bureau of Statistics, the combined rate of unemployment and time-related underemployment as a share of the labour force population (LU2) increased to 17.3 percent in Q3 2023 from 15.5 percent in Q2 2023.
“About 87.3 percent of workers were self-employed in Q3 2023. The unemployment rate increased significantly in Q3 2023 at 5.0 percent.
“With these figures, more efforts should be concentrated on keeping more people in employment while government should be challenged to implement its planned interventions in transportation, food security and general macro-economic stability.”
