Dr Tope Fasua, Special Adviser to the President of the Federal Republic of Nigeria on Economic Affairs, has disclosed that a significant number of Nigerians work in unstructured environments.
He noted that only about 7-8% of the working population in the country is under wage employment, which is controlled by the National Labour Congress (NLC).
Fasua said this during the TheWitness’ macroeconomic outlook for the third quarter of 2024 on Saturday.
The special adviser emphasized that the government’s primary focus is on those not under wage employment while noting that negotiations are ongoing between the government and the labour union.
Fasua said: “The issue of minimum wage and all these things about employment goes beyond NLC. The NLC controls about 7-8% of the working population in Nigeria. 88% of Nigerians work in unstructured environments, hustling, and farming. The concern of the government is that big number.”
The special adviser further said that the president is willing to make concessions as the reforms have necessitated the need for higher wages.
He said: “I think they are getting to a certain point where there will be an agreement and I see that the president is also ready to make concessions as well. Everybody knows that when you do the kind of very profound reforms that we have done, the wage curve will shift outwards, and everybody needs to earn a little bit more.”
Fasua also expressed concerns about whether the minimum wage should be the same across various states, which have varying levels of cost of living.
However, the NLC earlier opposed the call by some politicians for decentralizing minimum wage negotiations allowing states to have different minimum wages.
Also, the President of the NLC, Joe Ajaero, reaffirmed the position of the organized labour of N250,000 minimum wage demand following a meeting with President Bola Tinubu.
The National Bureau of Statistics (NBS) recently disclosed that 87% of Nigerians within the working age bracket, who do not have traditional salaried positions, have ventured into self-employment as of the third quarter of 2023. This marks a marginal decrease from the 88% recorded in the second quarter of the same year. The data suggests a shift in the Nigerian labour market, with some self-employed individuals either transitioning to salaried roles or facing the unfortunate closure of their enterprises.
More recently, a report by Moniepoint showed that unemployment motivated 51.6% of business owners in Nigeria’s informal sector to start their ventures, according to the 2024 informal economy. Based on data from over two million businesses in Nigeria, the report also notes that 35.9% of individuals started businesses because their formal employment was not providing enough income.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, earlier said that about 81% of Nigerians in the employment pool are not in any productive sector of the economy.
An African Development Bank (AfDB) report noted that about 34.3% of Nigerian workers, aged 15 and older, are working poor, living below the poverty line despite being employed. According to the Nigeria Country Diagnostic Note (CDN) 2023, many workers in Nigeria are trapped in poverty due to low-skilled and low-wage jobs.
World Bank economists also raised concerns about the effectiveness of retail and wholesale trade jobs in mitigating poverty in Nigeria, indicating that these positions may not provide a reliable pathway out of the country’s escalating poverty crisis.