US Government Says Nigeria’s N70,000 Minimum Wage Cannot Lift Citizens Out of Poverty

The United States government has stated that Nigeria’s recently approved minimum wage of N70,000 per month is inadequate to lift millions of Nigerians out of poverty. The claim was made in the 2024 Country Reports on Human Rights Practices, released by the US Department of State on August 12, 2025.

The report noted that despite the passage of the National Minimum Wage (Amendment) Act 2024, which doubled the previous minimum wage, the value of the naira’s steep devaluation has eroded the actual purchasing power of Nigerian workers. Currently, N70,000 is worth approximately $47.90 per month, an amount the report described as far below a living wage standard.

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Devaluation Erodes Minimum Wage Gains

The US government observed that although the legislation was intended to cushion workers from economic hardship, the collapse of the naira has left the wage insufficient. According to the report, the new minimum wage “was no longer higher than the poverty income level.”

The report further highlighted that the law only applies to public and private sector employers with 25 or more full-time employees. This legal framework excludes many Nigerians, particularly seasonal agricultural workers, part-time staff, commission-based workers, and those in the informal economy.

The Department of State underscored that many state governments have failed to implement the new wage due to financial constraints, meaning that millions of workers across the country continue to earn less than the stipulated minimum.

Weak Enforcement Mechanisms

One of the central criticisms in the report was the federal government’s weak enforcement of labor laws, particularly regarding minimum wage compliance, overtime pay, and occupational safety and health (OSH) standards.

While the law provides for a 40-hour workweek, two to four weeks of annual leave, and compensation for overtime and holiday work, enforcement has been minimal. The report noted that penalties for violations were “low and not commensurate with other crimes such as fraud — and were rarely applied.”

Although the Ministry of Labor and Employment has the legal authority to enforce compliance, the report emphasized that the number of labor inspectors was grossly insufficient for Nigeria’s large workforce. Furthermore, enforcement often required individuals to file complaints before the National Industrial Court, creating bureaucratic obstacles for workers seeking justice.

Informal Economy Excludes Majority

The US report also revealed that between 70 and 80 percent of Nigeria’s workforce is employed in the informal economy, where labor laws are scarcely enforced. This large segment of workers, ranging from market traders to artisans and domestic staff, is excluded from legal protections under the minimum wage law.

As a result, millions of Nigerians remain outside the scope of wage regulations, working long hours with little to no oversight regarding their safety, compensation, or labor rights.

Broader Human Rights and Economic Implications

Beyond economic concerns, the US government suggested that the inadequacy of Nigeria’s minimum wage carries broader human rights implications. Inadequate wages, coupled with weak labor protections, fuel poverty and inequality, undermining workers’ rights to fair pay and decent living conditions.

The report also pointed to the risks of excessive compulsory overtime in certain sectors, particularly for civilian government employees, where protections are often inconsistently applied.

The absence of clearly defined legal standards for “premium pay” or overtime has created loopholes that some employers exploit, leaving workers vulnerable to overwork and underpayment.

Calls for Reform

Labor experts have long argued that Nigeria’s wage policies fail to reflect the true cost of living. Rising inflation, food insecurity, and surging transportation costs continue to place immense pressure on workers and their families, even as wages remain stagnant.

The US government’s assessment reinforces calls by local labor unions for stronger enforcement mechanisms, higher wage benchmarks, and broader inclusion of informal workers under labor protection laws.

Nigeria’s Struggle With Poverty

Nigeria, Africa’s most populous country, faces persistent challenges with poverty reduction. Despite being rich in oil and natural resources, the World Bank estimates that more than 40 percent of Nigerians live below the national poverty line.

The new N70,000 wage was introduced by President Bola Tinubu’s administration in 2024 as part of efforts to mitigate economic hardship, particularly after the removal of fuel subsidies and subsequent inflationary pressures. However, as the US report indicates, the wage increase has been largely offset by naira depreciation and weak enforcement structures.

The report underscores the urgent need for Nigeria to strengthen wage enforcement, expand legal coverage to include informal sector workers, and adjust wage levels in line with real inflation and cost-of-living indices.

Without such measures, experts warn that millions of Nigerian workers will remain trapped in cycles of poverty, undermining both social stability and economic development.

As Nigeria continues to grapple with economic reform and international scrutiny, the debate over wage adequacy will remain central to labor rights and governance in the country.