Stagnant wages leave Nigerian workers trailing peers

Tunde Alabi, a fuel attendant in Lagos, earns the national minimum wage of N70,000 ($44) a month — an income that barely lasts two weeks. By the time he pays for transport to work, contributes to food at home, and buys essentials, there is almost nothing left.

“You just survive,” he said. “Saving is not even something you think about.”

His experience reflects a broader reality across Africa’s most populous nation, where low wages combined with rising inflation have eroded purchasing power and pushed workers into a daily struggle to meet basic needs. For millions of Nigerians, earning a salary no longer guarantees access to basic amenities such as food, transport, rent and electricity.

At the core of the crisis is a widening mismatch between income and cost of living.

Among comparable economies — including South Africa, Angola, Egypt, Morocco and Indonesia — Nigeria stands out for the sharpest imbalance between what workers earn and what they spend, leaving them with the weakest purchasing power in real terms.

Compared with its peers, Nigerian workers face a steeper squeeze. A worker in South Africa earning a minimum wage of about R5,240 ($312) a month enjoys higher purchasing power than a Nigerian earning N70,000. This allows for more reliable access to essentials like electricity, housing, transportation and healthcare.

“In countries such as South Africa and parts of East Africa, including Rwanda, there are clearer policy frameworks aimed at supporting citizens. Even where inflation exists, its impact is better managed,” said Jennifer Oyelade, a United Kingdom-based recruitment and talent acquisition specialist.

According to the International Monetary Fund, Nigeria’s income level remains below that of its peers. At $1,220 GDP per capita in 2025, it trails South Africa ($6,770), Ghana ($3,270), Egypt ($3,380), Morocco ($4,840) and Angola ($3,610), highlighting a wide earnings gap. This marks a decline from $2,140 in 2023.

While the country’s Purchasing Power Parity (PPP) figures appear closer to countries like Kenya ($2,560) and Egypt, economists say this masks the reality on the ground, where inflation — particularly for food and transport — rapidly erodes disposable income.

“The real income of Nigerians has declined sharply, leaving many worse off,” said Muda Yusuf, founder and CEO of the Centre for the Promotion of Private Enterprise. “When people fall into poverty, it affects nutrition, health, emotional well-being and overall productivity. These factors ultimately impact the performance of workers and businesses.”

Nigeria’s labour productivity is among the lowest globally, with the International Labour Organization (ILO) ranking it 143rd out of 191 countries, often cited at roughly $6.8 per hour worked. It also ranks outside the top 20 in Africa, reflecting a stagnant trend and a significant gap behind regional peers like Gabon, Egypt, and South Africa.

Human resource experts noted that many peer economies actively support households through subsidies in key sectors such as healthcare, education and energy, helping to reduce the direct burden on workers.

“As a result, when businesses operate and generate income in those economies, more of that value translates into measurable economic growth. Their GDP may not expand as rapidly as Nigeria’s in absolute terms, but the gains are more meaningful because basic costs are already cushioned,” Oyelade said.

She added that in Nigeria, households bear a much larger share of these expenses without adequate support.

“This means that even when the economy grows, the impact is diluted. In practical terms, growth would need to be significantly higher — almost double — to deliver the same level of improvement seen in other countries,” she said.

Data from Workpay shows that as of last year, Seychelles has the highest minimum wage in Africa at $465 per month, followed by Mauritius, Libya and South Africa at $326, $322 and $280, respectively. By contrast, Nigeria’s $44 minimum wage remains among the lowest relative to living costs.

“Seychelles rate reflects the country’s high cost of living and strong labor protections, ensuring better real wages for workers compared to other African nations,” the Kenyan-based HR & Payroll solution provider said in a recent article, adding that many African countries are now exploring models beyond the minimum wage—targeting living wages that align more closely with local cost of living realities.

For most Nigerian workers, survival spending dominates. Households routinely allocate as much as 65 percent of income to food, transport and energy, leaving little room for savings or discretionary spending.

Recent data from SBM Intelligence highlights the depth of the pressure. The average cost of preparing a pot of jollof rice for a family of five rose by 19.4 percent to N30,435 ($20) in the six months to March 2026. At current levels, a single pot now consumes more than 40 percent of the monthly minimum wage.

Inflation continues to intensify pressures on households. According to the National Bureau of Statistics, headline inflation rose for the first time in a year to 15.38 percent in March, up from 15.06 percent in February, while food inflation climbed to a five-month high of 14.31 percent, reversing earlier signs of easing.

The pressure is further compounded by rising energy costs. “The cost of fuel, for instance, has risen from about an average of N750 ($0.50) per litre last year to roughly N1,300 ($0.87), significantly increasing transport and production costs,” said Olamide Adeyeye, head of programmes and country manager at Jobberman Nigeria.

“This has placed additional pressure on disposable income, weakened consumer confidence, and affected productivity, as well as the growth of businesses.”

Although the economy has continued to expand — with GDP growth of 3.87 percent and total output rising to N441.5 trillion ($285 billion) — the benefits have yet to translate into improved living standards for workers.

Across emerging markets stronger industrial growth, rising wages and better infrastructure have helped align incomes more closely with living costs. But Nigeria’s structural challenges — including high informality, weak industrialisation and recurring currency depreciation — continue to weigh on worker welfare. Analysts say the widening gap between wages and living costs underscores a deeper issue: economic growth without corresponding income growth does little to improve everyday life.

For Tunde and millions like him, that reality is already clear. Even as the economy grows on paper, the ability to afford a decent standard of living remains out of reach.