Lagos state governor, Babajide Sanwo–Olu recently announced his plans to commence the payment of N85,000 as the minimum wage to workers across the state.
He made this announcement during an appearance on Channels TV’s “One-On-One with Babajide Sanwo-Olu.”.
Background
Earlier this year, the federal Government announced the upward review of the national minimum wage ton N70,000 considered at least a living wage hoping that such measures would assist in improving the standard of living amongst Nigerians.
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In recent months, compliance with the new minimum wage among states have been low as only the governors of Lagos, Osun, Edo, Benue, Borno, Oyo, Nasarawa, Ondo and Adamawa states have started or verbally committed to paying the new minimum wage of N70,000.
It is therefore news to the ear that the governor of Lagos state has expressed willingness to go beyond the new national minimum wage, but to most of the workers in the state, the question remains how far the new minimum wage can go in meeting their needs.
Economic demands of living in Lagos
Lagos is regarded as the economic capital of Nigeria and is ranked by Numbeo as the most expensive city to live in Nigeria with a Cost of living index of 35.1.
The high cost of living in Lagos can be attributed to a host of factors ranging from the exorbitant price of transportation, the rising inflation on food and housing, the overpopulation of the area, amongst other factors.
Transportation Prices continually soar
Transportation prices in Lagos are at an all-time high, mostly due to the removal of the fuel subsidy regime and the resulting hike in fuel prices. In recent months fuel prices in Lagos have increased from N885 per litre to around N998 per liter with some filling stations selling as high as N1,050 per litre.
This has led to significant changes in the price of transportation across the state as citizens now have to pay through their noses to transport themselves round the ever bustling city.
Checks reveal a trip from Iyana Iba to Iyana Ipaja axis of Lagos,which used to cost N500, now cost between N700 and N800; transport fares across other routes are not left out with increases going as high as 75% – 100% on several routes.
The Housing Challenge
The explosive growth of Lagos has brought about a worrying housing shortage across the state with the state accounting for about 5 million housing deficit representing 31% of the estimated national housing deficit of 18 million.
This situation has led to the growth of slums with over 20million of Lagos residents living in slums scattered across the state.
According to the World bank, around 50-75% of the Lagos population currently live in informal settlements with around 140 slums identified across the state.
This widespread occupation of slums is unrelated to the exorbitant cost of renting houses in the state with an average 2-bedroomed apartment in Lagos going for between 2-3 million Naira depending on the area of the city it is located while a single room apartment in the city currently going for between N150,000 – N200,000 per annum.
This high cost of housing makes ridicule of the proposed N85,000 minimum wage in a a city like Lagos
Food Prices on the up
The cost of food across the state today is constantly on the high. It costs an average of N1,200 – N1,500 to get a decent one-time meal in the state and considerably more to get a top-class meal anywhere across the state.
The prices of raw food items are not left behind, a basket of tomatoes currently goes for N4,000 from the initial price of N1,500, the price of a paint bucket of rice has almost doubled in the past few months same as several other food items.
Significance of the N85,000 Minimum wage
When the implementation of the N85,000 minimum wage begins, Lagos is expected to officially become the highest paying state in the country which would provide bragging rights for Gov. Babajide Sanwo-Olu but for the recipients of the new minimum wage, the increase would be like trying to fill up a leaky bucket with water, just enough to sustain them but not enough to improve their true standard of living.
To put the proposed minimum wage in context, an average worker who spends between N1,500 – N2,000 on transportation daily would have spent about 50% of the new minimum wage in a month leaving little for such a person and his family to live on at the end of the month.
It would take a person earning this amount about three months salary to pay his rent if it is around N250,000 which is the average cost of a self-contained apartment in Lagos. This is in addition to the cost of food in the state as well as other miscellaneous expenses which when factored in makes a mincemeat of the proposed N85,000 minimum wage.
The new minimum wage of N85,000 is a welcome development but feels insufficient in a place like Lagos in light of the widespread inflation in Nigeria today.