However, when converted to US dollars using the Central Bank of Nigeria's exchange rate of N1,584 per US dollar on Friday, the new minimum wage amounts to approximately $44.2.
The Nigerian government's approval of a minimum wage of N70,000 per month for Nigerian workers has been hailed by the All Progressives Congress (APC) as a notable accomplishment.
However, when converted to US dollars using the Central Bank of Nigeria's exchange rate of N1,584 per US dollar on Friday, the new minimum wage amounts to approximately $44.2.
This figure is lower than expected, particularly considering the high cost of living in Nigeria.
For context, as of July 18, 2024, a 50kg bag of high-quality rice costs N92,000 in Enugu State and other parts of the South East, while brown rice of the same quantity costs N86,000 in local markets. Additionally, the price of a tuber of yam in the South East ranges from N7,000 to N12,000, depending on its size.
The devaluation of the naira has unfortunately diminished the purchasing power of the new minimum wage.
An analysis of the Nigeria Foreign Exchange Market (NFEM) reveals a substantial decline in the naira's value, making it difficult for workers to afford basic necessities despite the increased minimum wage.
On Thursday, July 18, the naira's exchange rate reached N1,600 to the US dollar in the parallel market, prompting the Central Bank of Nigeria (CBN) to announce the sale of $20,000 to each Bureau de Change (BDC) at a rate of N1,450 per US dollar.
This move aimed to stabilize the currency and control the exchange rate. Notably, when the minimum wage negotiations began four months ago, a 50kg bag of rice cost around N50,000.
However, by the time the new minimum wage of N70,000 was approved on Thursday, the price of a 50kg bag of rice had surged to N92,000, representing an increase of N42,000."