Small and Medium Enterprises (SMEs) in Nigeria have expressed concern about their ability to implement the recently approved N70,000 minimum wage for Nigerian workers. President Bola Tinubu signed the Minimum Wage Act (Amendment) Bill into law, which applies to the entire nation, including the Federal Government, states, Local Governments, private sector, and individual employers.
As of December 2020, the National Bureau of Statistics reported that there were over 39 million micro, small, and medium enterprises in Nigeria. However, the country has seen a decline in small-scale industrialists, with numbers dropping by 45% from 2020 to 2022.
SME operators warn that the new minimum wage could lead to business closures and layoffs, exacerbating the unemployment rate in Nigeria. Segun Kuti-George, National Vice President of the Nigerian Association of Small-Scale Industrialists, acknowledged that while the minimum wage increase is a positive step, it may be challenging for small businesses to implement due to existing financial burdens.
The concern lies in the potential burden this wage increase will place on small businesses, who are already struggling with high costs of production. While the new minimum wage aims to improve the financial well-being of Nigerian workers, the question remains as to whether small businesses can sustainably meet this expectation.
