On April 18 2019, President Muhammadu Buhari signed into law a bill to increase Nigeria’s minimum wage with immediate effect, raising the minimum wage from the previous N18,000 to 30,000.
Though the increase excited many salary earners, but the question is whether the N30,000 can actually sustain a family of one, judging from the economic condition of the country.
It would be recalled that the organized labour initially demanded for a minimum wage of N50,000 after studying the average spending of Nigerians.
While canvassing for the new minimum wage, Labour had demanded for N50,000 in view of the high cost of living due to dwindling value of naira in the international market worsened by the economic recession the county just experienced. But the three tiers of government-Federal, state and local government were adamant in paying the N50,000 demanded by labour, citing paucity of funds. The 30, 000-naira, labour said can barely feed a worker`s small family unit not to talk of saving for home ownership.
It is no longer news that the labour leaders have conceded after several meetings and negotiations with government at all levels to accept the N30,000 as the new minimum wage.
However, in reality, salary earners, especially those at the low level cadre may find it difficult to sustain their family and save to be home owners.
Africahousingnews.com reporter sought the views of some civil servants over the take home pay of N30,000 minimum wage and they were unanimous in calling it “a peanut” and practically impossible to save to build houses of their own.
A civil servant, Leke Ojora said ‘’ Looking at it from the present value of naira, N30,000.00 cannot do anything. N30,000 per month will amount to N360,000 per year, the taxable income is N4,000 per month, amounting to N48,000 as annual tax. This comes to a disposable income of N26000 per month.
So what can a worker do with N26,000 per month? Assuming that such person is single and with no dependent relatives, he will incur feeding, clothing and transportation expenses. Also If this person is on NHF, contribution rate is 2.5% (30000 multiply by 0.25) gives us 7,500 monthly. So, we remove 4000 tax and 7500 NHF contributions then what remains is N18,500.’’He said that home ownership for the workers at low category can only be possible if houses are further discounted.
“Beneficiaries can pay up before they get to the retirement age. But we all know that developers always require an initial deposit from prospective owners, this will completely disqualify the people on minimum wage,’’ he added.
Another civil servant, Mr Abayomi Samuel said ‘’It’s not possible to own a house earning N30,000 as monthly salary. This is due to inflation and high cost of building materials. Besides, one needs to pay for transport, school fees, water bill, electricity bill, and telecommunication bill. So because of this it’s impossible. The naira is devalued.
It remains to be seen if the dreams of millions of workers currently earning the N30, 000 minimum wage to own a house of their own will be fulfilled in their life time.
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