Ahead of the crucial negotiation for the country’s minimum wage review, the rising number of working poor, spike in the percentage of workers outside formal employment and the sheer size of individuals earning N70,000 and above have raised questions about the relevance of national wage setting, an exercise designed to protect workers against abusive remuneration.

Amid grumblings in the labour movement circle that the N70,000 minimum wage falls below what anybody can consider a living wage, the latest inflation expectation survey of the Central Bank of Nigeria (CBN) puts the high inflation perception of households earning below N70,000 at 68.4 per cent – the highest.

Understandably, at a 15.4 per cent inflation rate, or less than half of what it was at its peak in 2024, those earning below the minimum wage consider the current price level very high, the CBN said. They pointed to high energy costs, insecurity, interest rates, and the exchange rate as key drivers of inflation.

Last week, fuel prices were adjusted to a ceiling of N1,350 a litre by the Federal Government, about 570 per cent above the pre-subsidy removal pump price.

The government had promised to cushion the economic pains of subsidy removal on poor workers. But the impacts of the promised social safety programme and compressed natural gas (CNG) revolution have been scanty.

Part of the fiscal gains of the subsidy removal was expected to be used to fund the social schemes. Three years later, not many Nigerians admitted their lives have been impacted by the schemes.

The Federal Government said over N9 trillion or about 180 per cent of its share of the proceeds went into financing of wage adjustment of its workers, which are estimated at 1.2 million or 0.5 per cent of individuals affected by the removal of fuel subsidy.

The CBN survey aligns with other reports, including that of the Nigerian Economic Summit Group (NESG), which puts the number of workers engaged in the unregulated informal sector at 92 per cent, leaving only eight per cent for the entire formal private and public sectors of the economy.

Three years after President Bola Tinubu decided to end the petrol subsidy programme, the government reportedly saved at least N15.8 trillion in direct cost stoppage and pooled a cumulative N60.75 trillion in the Federation Account Allocation Committee (FAAC). But the windfall has not translated into relief for millions of ordinary Nigerians.

Inflationary pressures, rising energy costs and the squeeze on small businesses continue to deepen the cost-of-living crisis, leaving vulnerable households struggling to survive.

Targeted social safety nets remain largely on paper while rising food prices, transport costs and high utility bills have eroded household incomes, pushing millions further below the poverty line.

Small and medium-sized enterprises (SMEs), already burdened by high operating expenses, continue to struggle with reduced consumer demand, underscoring the widening gap between improved micro-outlook and general welfare.

Analysts have blamed inefficient revenue management and inadequate independent revenue generation by different tiers of government as factors that prevent the government from investing in programmes that can lift the majority out of misery.

While government revenues surged, intervention CNG buses and conditional cash transfers have been poorly executed.

For workers, the combined impact of inflation and currency depreciation has translated into a steady decline in real income. Salary earners have struggled to keep pace with rising household expenses, leaving many families spending a greater proportion of their income on food and transportation alone.

The Nigeria Labour Congress (NLC) rejected the Federal Government’s social intervention programmes as a sustainable response to the hardship triggered by the removal of fuel subsidy and other economic reforms, urging the government to prioritise higher wages and policies that enable Nigerians to earn sustainable incomes.

Assistant General Secretary of the NLC, Chris Onyeka, said the government’s approach of distributing palliatives and other interventions would not address the structural causes of poverty, arguing that putting more money in the hands of workers would have a wider multiplier effect on the economy.

Speaking on the impact of the reforms and the way forward, Onyeka said workers’ incomes should be strengthened because wage earners spend largely on locally produced goods and services, thereby stimulating demand, production and employment.

According to him, stronger purchasing power would enable workers to support their dependents, increase demand for locally manufactured products and encourage manufacturers to expand production and employ more people.

Onyeka criticised the administration’s reliance on social intervention programmes, questioning the transparency and effectiveness of mechanisms used to identify beneficiaries and distribute funds. He also called for greater transparency in the social register, arguing that workers’ representatives and civil society organisations should participate in its compilation to ensure that genuine vulnerable Nigerians are captured.

The NLC official said government could also provide immediate relief to informal workers by reducing fees and levies imposed on market traders and commercial transport operators by local and state authorities.

He argued that reducing such charges would immediately increase the disposable income of low-income earners without requiring the government to distribute cash.

Onyeka faulted the condition of federal roads across the country, saying poor infrastructure and insecurity were worsening the cost of doing business and the movement of people and goods.

He urged the administration to move beyond political expediency and focus on policies capable of restoring purchasing power, creating jobs, improving infrastructure, securing the country and making economic activity more productive.

Similarly, Executive Director, OJA Development Consult, Jide Ojo, challenged the Federal Government to give Nigerians a verifiable account of the reported N15.8 trillion saved from fuel subsidy removal, saying citizens are yet to see commensurate impact of the savings on their lives.

Ojo, who spoke on the impact of fuel subsidy removal, the worsening hardship and the way forward for the administration, said government could not continue to cite the savings as an economic achievement without showing Nigerians what the funds had been used to accomplish.

He argued that the demand for accountability should not be interpreted as a call for the return of fuel subsidy, warning that reversing the policy would worsen the country’s fiscal challenges.

Ojo also demanded evidence of the government’s reported N600 billion expenditure on social investment, asking the government to demonstrate the impact of the spending and provide data showing how many Nigerians benefited.

He faulted the CNG project, saying the initiative would not achieve its intended purpose without adequate infrastructure and lower conversion costs. He questioned how motorists were expected to embrace CNG when access to refuelling stations remained limited.

According to him, the situation was particularly problematic in Abuja, where only a handful of filling stations dispense CNG despite the city’s size. He also questioned the economic viability of spending about N1.5 million to convert a private vehicle to CNG, particularly where the vehicle itself had significantly depreciated.

Ojo said government needed to make CNG more accessible by ensuring that more filling stations dispense the product and by addressing the cost of conversion.

Founder, Pax Empathica Global Institute for Policy, Leadership and Governance, Lekan Olayiwola, punctured the Federal Government’s renewed push to reduce transportation costs, describing the intervention as a politically-motivated attempt to win citizens’ support ahead of the 2027 general elections rather than a sustainable response to the economic hardship caused by fuel subsidy removal.

Botti argued that the government’s decision to remove fuel subsidy amid existing economic turbulence worsened the cost of living, with higher fuel prices feeding directly into transportation, food prices and other areas of household expenditure. He said Nigerians had endured significant hardship over the past three years and would not easily be persuaded by what he described as late interventions designed to influence their political choices.

According to him, the absence of adequate social infrastructure, particularly an efficient public transportation system, has compounded the impact of subsidy removal.

The economist also questioned the effectiveness of the government’s CNG initiative, arguing that its impact remains limited because very few vehicles have converted to CNG, while the cost of conversion remains unaffordable for many Nigerians. He said the government should focus on permanent social infrastructure and policies that directly reduce the cost burden on households rather than temporary interventions. Botti also criticised other economic policies, including the naira’s flotation, which he said was implemented at a period when the economy was already experiencing severe inflationary pressure.

He further questioned the transparency and accountability surrounding government spending on social intervention programmes, alleging that benefits often fail to reach ordinary Nigerians.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, urged state and local governments to deploy the increased revenues accruing to them to ease the burden of the cost-of-living crisis on Nigerians.

Yusuf said while the Federal Government should be credited with achieving greater macroeconomic stability, particularly in the foreign exchange market, the responsibility for translating the increased public revenues into tangible relief for citizens now rests with the sub-national governments.

Speaking on the impact of the fuel subsidy removal and other economic reforms, he said the reforms had imposed high costs on citizens through higher prices arising from the foreign exchange reforms and subsidy removal.

However, he noted, the revenue benefits of the reforms had increasingly accrued to the states and local governments through higher FAAC allocations. According to him, the sub-nationals are now “the biggest beneficiaries” in terms of revenue, receiving significantly more than the Federal Government from the enlarged fiscal pool.

Yusuf called for greater scrutiny of how the additional revenues are being spent, arguing that state governments should prioritise measures capable of directly reducing the burden on households and businesses. He acknowledged that the Federal Government also had a critical role to play, particularly in maintaining macroeconomic stability.

On the numerous social intervention programmes being implemented by the Federal Government, he said the centre alone could not effectively solve the hardship confronting citizens, arguing that states and local governments were better positioned to transmit interventions to the grassroots, particularly given the substantial resources now available to them through FAAC allocations.

An economist and social action expert, Isaac Botti, said the government’s latest push to reduce transportation costs from October 1 was significant because transport remained one of the areas where the impact of subsidy removal was most directly felt by households.

Olayiwola described the initiative as arguably the government’s strongest attempt yet to make one of the supposed efficiency gains from the reform visible to citizens.

He said the reform should not be described as an outright failure because it substantially altered the government’s fiscal position, strengthened foreign reserves and contributed to a more stable economic framework.

However, he cautioned that cheaper CNG would not automatically translate into cheaper transport fares, noting that fuel was only one component of vehicle operating costs. (The Guardian)