The real policy challenge is, therefore, not merely how much should a Nigerian worker be paid? It is also what kind of economic system surrounds that worker, how much productive value does that system enable the worker to generate, and how much of that value survives the structural costs imposed between earning an income and meeting the basic requirements of everyday life?
In recent weeks, there has been extensive commentary on the Federal Government’s scorecard, including economic stability, nominal GDP growth, the steady supply of petroleum products, tax administration reforms, greater responsibility by state governments for paying workers’ salaries and, most significantly, increased revenue shared among the three tiers of government. These developments have largely been presented as evidence of improved economic conditions, more responsive governance and enhanced citizen welfare.
What has received less attention, however, is the social and economic cost of adjustment associated with the major economic decisions taken by this administration: the removal of the petroleum subsidy and the floating of the naira. Both have contributed significantly to the sharp rise in the real cost of living across the country. This also raises a related problem: the tendency to compare Nigeria’s pump price of petroleum products with those of other countries at face value.
