IFaced with a persistent rise in the prices of goods and services occasioned by runaway inflation in Nigeria, many civil servants earning around the minimum wage of 30,000 naira accept menial jobs to meet their basic needs.
A number of workers, who fall into this category, are now rationing basic necessities such as food, shelter and clothing to cope with the difficult economic situation prevailing in the country.
Being a public primary school teacher in the Kano metropolis on a monthly salary of 33,800 naira is not enough for AbdulHadi Bako to put food on the table for his family of seven.
Bako, 45, a level 7 officer, is fully aware of the enormous responsibilities that await him and assumes them headlong. After closing school around 2 p.m., he hits the road on a tricycle, commuting between neighborhoods to supplement his meager salary.
He said his salary of 33,800 naira was used to take care of groceries and a few errands that would last a month for his family, until recently when his purchasing power took the heavy toll of rising prices. inflation.
“Food prices keep rising and my salary is no longer enough to store food at home for a month,” Bako lamented, his voice filled with anguish. “Even though I only had a wife and child, there was no way to survive on 33,800 naira for a month.”
To bridge the huge gap between his salary and the cost of living, Bako gets behind the wheel every day at a time when he should be resting and preparing well for the next day’s task in class.
“I ride a tricycle after closing school to support the small salary I earn. In fact, I make more money doing it than teaching. This is how I was able to take care of myself and my family,” he said.
Although he is single, the 35,000 naira that Olamilekan Shorunke brings home every month is less than what he needs to live on and support his mother and two siblings. With the biting inflationary effect, which has depreciated the value of his salary sharply in recent times, Shorunke, a 29-year-old security guard on a Lagos State campus, is going the extra mile to fill the vacuum created by the derisory salary.
He said, “I am a bachelor. I have a fiancée, but what I currently earn does not encourage me to get married. When I was newly employed I was earning N20,000 before it was increased to N35,000 two years ago.
“I take care of my mother and my brothers and sisters. Every month I give him N10,000; give my siblings N5,000; buy groceries worth N10,000 and keep the remaining N5,000 for my transportation and other expenses.
“At this time last year, with 10,000 naira, I would buy a container of paint containing rice, beans, garri, 75cl of palm oil, peanut oil and a few other ingredients. But now I can only buy half of these items with N10,000. It’s really hard, but I’m trying to survive by the grace of God. From time to time, I do catering at parties to supplement my salary.
More than four months after raising funds through periodic contributions to rent a one-bedroom apartment in the Bariga neighborhood of Lagos, rent continues to burn as he struggles to find ways to furnish the apartment.
“I still live with my mother because I can’t afford to buy the necessary things to furnish the rented apartment,” he laments.
Bako and Shorunke’s struggles illustrate the struggle of millions of employed but poor Nigerians living on the 30,000 naira minimum wage in the face of runaway inflation.
Nigeria’s Consumer Price Index (CPI), which measures the average change over time in the prices of goods and services consumed daily by people, reached 20.77% in September 2022, from 20.52% in august. Current inflation rates are the highest since 2005, according to the National Bureau of Statistics.
The August increase was 3.52 percentage points higher than the rate recorded in August 2021 and a marginal reduction of 0.05% from the July 2022 rate.
The BNS attributed the increase to higher prices for bread and cereals, potatoes, yams and other tubers; fish, meat, oil and fat, which Bako, Shorunke and other Nigerians consume daily.
He also blamed the increase on “disrupted food supplies, increased import costs due to continued currency depreciation and a general increase in production costs”.
Addressing members of the Nigeria Labor Congress (NLC) at a public presentation in Abuja last month, Labor and Employment Minister Chris Ngige said the government plans to increase the current minimum wage of 30,000 naira.
Ngige said the increase in the minimum wage was necessary due to the current global inflation which has impacted people’s purchasing power.
However, many analysts described the move as impractical given declining government revenue and growing debt, which stood at 42.84 trillion naira as of June 30 and gobbles up 90% of all government revenue. in the service. Moreover, since President Muhammadu Buhari signed into law the minimum wage law in 2019, many states – according to union leaders – have failed to meet the payment of 30,000 naira, thus casting doubt on the implementation. of Ngige’s engagement at the national level.
Ngozi Obafemi, professor of economics at the University of Calabar, urged the government to raise wages and put in place policies to reduce the rate of inflation, noting that the latter would have far-reaching impacts on well-being. to be of the people.
Obafemi, a fellow of the African Economic Research Consortium and the Nigerian Economic Society, said overreliance on imported goods is aggravating inflation in Nigeria and advised that as the upcoming general elections approach , the incumbent government as well as the incoming administration should come up with initiatives that will make Nigeria a productive nation.
She said, “Nigeria is a consumer economy. We consume more than we produce. We cannot continue to consume without producing and expect incomes to rise or inflation to fall. The government must do something to increase production, especially exports. The government must also stop the theft of oil as this is the main reason why revenues have been cut.
“Many businesses have left Nigeria due to poor infrastructure and electricity, among other things. So the government must do something to encourage production. He must stop the import of fuel by repairing our refineries or building new ones. The high cost of fuel increases the cost of production as companies power generators at a high cost.
“The government needs to put infrastructure in place; taxes must be reduced to encourage people to produce so that our products are more than our consumption. If our production increases, it will certainly lower inflation. There is imported inflation; if we produce more at less cost, it will stop. For production to increase, policies that will reduce production costs must be put in place.
Obafemi’s observation echoes the NBS report on Nigeria’s 1.94 trillion naira foreign trade deficit in 2021, implying a negative trade balance as the country’s economy remains import-driven .
In 2020, Nigeria recorded its first annual trade deficit in four years when imports exceeded exports by 7.37 trillion naira.
In its report, “Foreign Trade in Goods Statistics (Q4 2021)”, released in March 2022, the BES revealed that the country’s total exports for 2021 stood at N18.91 trillion while total imports were assessed at N20.84 billion.
“The value of total imports in 2021 stood at N20.84 trillion, 64.11% higher than the value recorded in 2020, while total exports were valued at N18.91 trillion, a increase of 50.99% compared to the recorded value. in 2020. Overall in 2021, merchandise trade recorded a deficit of N1.94 trillion,” the report states.
An economist from Olabisi Onabanjo University, Ogun State, Prof. Sheriffdeen Tella, said that to tackle headline inflation, government needs to design and implement policies that will boost local production and strengthen the naira against the dollar.
“The government said they were considering raising wages, but I know they are saying this to prevent the union from complaining. What the government should be doing is making sure that inflation goes down; ensure the naira appreciates and production improves. Once production improves, some of those prices will come down,” he said, saying Nigeria is largely a consumer country.
Tella added, “Once we are able to put policies in place to improve production at lower cost, prices will generally come down. When you say that you are going to increase wages, there is what is called an “announcement effect” which will cause prices to rise. People who don’t work for the government will also want to have their own cut. But if we improve production, there will definitely be enough for people to buy and prices won’t go up anyway.
“The government also needs to strengthen the exchange rate. When the exchange rate improves, those who want to import raw materials will pay less. And that will help bring down the prices of the goods they produce. We must also encourage farmers to produce. Insecurity chased them away. The government must improve security.