Members of Nigeria’s organised private sector have cautioned against expecting private sector employers to automatically adopt the ₦100,000 minimum wage recently introduced by some state governments, warning that many small and medium-sized enterprises (SMEs) are already struggling with rising operating costs and declining profitability.
Business leaders argued that while large corporations and high-performing sectors may be able to sustain wage levels above ₦100,000, many smaller enterprises lack the financial capacity to absorb such increases under prevailing economic conditions.
The comments come amid growing debate over a possible review of Nigeria’s national minimum wage and recent decisions by several state governments to raise workers’ salaries to ₦100,000.
President of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Leye Kupoluyi, said private sector employers should not be compelled to implement wage levels beyond their financial capabilities.
“National minimum wage does not necessarily mean private sector operators must pay their workers the same level if they cannot afford such a level at the time of introduction. This point is based on too many cost burdens that businesses are coping with at this time,” Kupoluyi said.
He urged the government to address structural challenges affecting businesses, including high energy costs, improved fuel supply to local refineries, poor road infrastructure, and stronger support for strategic industries.
Kupoluyi also expressed concern about the government’s fiscal position, noting that rising debt-servicing obligations could further constrain investment in infrastructure and economic development.
Similarly, Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde, said that while the proposed wage increase reflects the realities of rising living costs, it cannot automatically become binding on private sector employers.
“We commend the state governments for proposing the increase of the minimum wage to ₦100,000. This seems plausible in view of the biting economic situation, made worse by the increasing cost of energy,” Oyerinde said.
However, he stressed that the process for determining a national minimum wage is governed by tripartite negotiations involving government, employers, and organised labour.
“While the government can, at a bipartite engagement with the unions, agree on what the wages would be, that cannot be binding on the organised private sector. For any wage increase to be nationally binding, the International Labour Organization process of negotiating a minimum wage must come into play,” he added.
Oyerinde argued that reducing the cost of living and improving economic conditions would have a more sustainable impact on workers’ welfare than imposing wage increases that businesses may struggle to maintain.
National Vice President of the National Association of Small-Scale Industrialists (NASSI), Segun Kuti-George, echoed similar concerns, describing the proposed wage level as potentially suitable for public sector workers but unrealistic for many private businesses.
“Whereas it is good for the public service, the private sector should not be constrained to follow suit. It is desirable but not feasible for the private sector,” Kuti-George said.
According to him, many micro, small, and medium-sized enterprises are already contending with escalating production costs and shrinking profit margins.
President of the Association of Small Business Owners of Nigeria (ASBON), Femi Egbesola, also noted that businesses’ ability to implement a ₦100,000 minimum wage would vary according to their size, financial strength, and industry.
“The move by some state governments to raise the minimum wage to ₦100,000 is commendable and reflects the reality of the rising cost of living. However, whether the private sector can match this level depends largely on the size, capacity, and financial health of individual businesses,” Egbesola said.
He explained that while larger organisations may be able to adjust their wage structures to attract and retain talent, many SMEs continue to grapple with inflation, soaring energy costs, and weak consumer demand.
“For such businesses, an immediate increase to ₦100,000 may be difficult to sustain,” he added.
Egbesola urged policymakers to focus on reducing the cost of doing business, arguing that a more supportive operating environment would enable employers to improve wages sustainably without risking job losses.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said wage realities differ significantly across sectors, company sizes, and geographical locations.
According to Yusuf, industries such as financial services, oil and gas, and information and communications technology already pay salaries well above ₦100,000, with some organisations offering entry-level remuneration ranging from ₦150,000 to ₦200,000.
However, he noted that sectors including manufacturing, agriculture, education, retail, and hospitality continue to face severe cost pressures.
“For many small businesses, it is a struggle to even keep the business afloat. That is the reality,” Yusuf said.
He added that many employers are still finding it difficult to comply with the current ₦70,000 national minimum wage because of soaring energy costs and weak consumer spending.
“Many of the small businesses will have to struggle to be able to meet this ₦100,000. Even the ₦70,000, many of them are still struggling to pay it because they can’t give what they don’t have,” he said.
Yusuf further noted that businesses operating in rural communities would face even greater challenges due to lower purchasing power and weaker revenue generation.
The business leaders maintained that improving infrastructure, lowering production costs, and creating a more enabling business environment would be more effective in enhancing workers’ welfare than imposing wage levels that many employers may be unable to sustain. They argued that sustainable wage growth must be accompanied by policies that strengthen business productivity, profitability, and long-term employment generation.
