Yemisi Izuora
The Center for the Promotion of Private Enterprise (CPPE) has provided a comprehensive overview of what constitutes a better welfare system that will drive public service delivery.
The Chief Executive Officer (CEO) of the Center and an economist, Dr. Muda Yusuf, in a policy brief, titled’ BEYOND WAGE INCREASES: REFRAMING LABOUR WELFARE PRIORITIES IN NIGERIA” called for a fundamental shift in labour advocacy—from a narrow wage-centric approach to a broader, more holistic welfare framework.
He said, “This repositioning is more aligned with Nigeria’s economic realities and offers a more sustainable pathway to improving living standards, boosting productivity, and strengthening economic resilience.”
The Centre observes that the discourse on labour welfare in Nigeria has been largely dominated by wage negotiations, particularly against the backdrop of rising inflation and escalating cost-of-living pressures.
“While wage adjustments are necessary and often justified, they are clearly insufficient as a standalone strategy for improving workers’ welfare.
“In an economy characterised by persistent inflationary pressures, structural bottlenecks, and weak public service delivery, nominal wage increases are frequently eroded within a short period.” Yusuf cautioned.
According to him, Nigeria’s inflationary environment—driven largely by food, energy, and transportation costs—has significantly weakened real incomes. For most households, especially low- and middle-income earners, food and transport account for a dominant share of expenditure. In addition, rising energy costs, housing pressures, and limited access to affordable social services continue to compress disposable incomes.
In this context, CPPE emphasizes that the central objective of labour welfare policy should be the protection of real incomes, not merely nominal wage growth.
He argues that rising food prices, transport fares, and housing costs remain the most immediate threats to workers’ welfare.
He says that Labour advocacy should therefore prioritise structural interventions that address these cost drivers.
This includes scaling up investment in mass transit systems to reduce commuting costs, policies to boost agricultural productivity and curb food inflation, measures to moderate rental pressures in urban centres, and the provision of subsidised staff canteens by medium and large enterprises as well as government institutions. Tackling these cost pressures will deliver more durable welfare gains than periodic wage increases.
“Out-of-pocket healthcare expenditure remains excessively high, exposing workers to significant financial risks. CPPE underscores the need for expanded coverage under the National Health Insurance Authority, strict enforcement of employer-provided health insurance schemes, and strengthened occupational health and safety standards. Improved health security is critical not only for welfare but also for productivity.” Yusuf added.
He went on to explain that, “Retirement insecurity continues to pose a major concern across both formal and informal sectors. Labour advocacy should focus on ensuring stronger compliance with pension remittances, expanding micro-pension schemes for informal workers, and enforcing sanctions against defaulting employers. A credible and efficient pension system is essential for long-term welfare sustainability.”
He also noted that increasing prevalence of casualisation and contract employment has significantly weakened job security and that many workers face unstable employment conditions, weak labour protection enforcement, and the absence of unemployment insurance.
The CPPE therefore urged labour Unions to push for stronger regulatory frameworks, improved enforcement mechanisms, and robust redundancy protection systems.
On the other hand, he said energy costs—covering both electricity tariffs and generator fuel—constitute a major burden on workers and households. Addressing this requires improved electricity supply reliability, reduced dependence on self-generation, and a more transparent and efficient tariff regime. Lower energy costs will have a direct positive impact on disposable incomes.
Also, Nigeria’s heavy reliance on informal transport systems exposes workers to high and volatile commuting costs.
There is an urgent need for investment in affordable and efficient mass transit systems, stronger regulatory oversight to curb exploitative pricing practices, and policies encouraging employers—both public and private—to provide staff transportation on key routes.
In addition, he added, “Housing costs remain a major driver of urban poverty, with high rent-to-income ratios and limited access to affordable housing finance. CPPE advocates for expanded affordable housing schemes and reforms to mortgage financing frameworks to ease the burden on workers.”
He said sustainable welfare improvements ultimately depend on enhanced earning capacity. Continuous skills development, vocational training, employer-supported capacity building, and stronger public-private partnerships are critical to addressing skills gaps, improving productivity, and boosting long-term income prospects.
Nigeria’s social protection architecture remains weak and fragmented. CPPE calls for the introduction of unemployment insurance schemes and the expansion of targeted social safety programmes. Effective safety nets are essential to protect workers during economic shocks and periods of vulnerability.
Workers’ welfare is determined by net income rather than gross wages.
The CPPE highlights concerns about limited tax relief for low- and middle-income earners and calls for tax reforms that enhance disposable income while reducing regressive burdens.
Rather than episodic and often reactive wage adjustments, there is a strong case for institutionalising mechanisms that protect real incomes. This includes inflation-linked wage adjustments, periodic cost-of-living adjustments (COLA), and more transparent and predictable wage review frameworks.
In conclusion, he said the CPPE strongly advocates a transition from wage-centric to welfare-centric labour engagement, with a focus on structural cost drivers and access to essential services.
There is also a compelling need to strengthen public service delivery in critical sectors such as healthcare, education, transportation, and power, as this would significantly reduce household expenditure burdens.
In addition, policies that promote productivity in agriculture, energy, and logistics should be prioritised to support sustainable welfare gains. Regulatory enforcement must be strengthened, particularly in areas of labour protection, pension compliance, and workplace standards. Finally, government should accelerate efforts to build robust and inclusive social protection systems.
“Nigeria’s current economic realities demand a fundamental rethink of labour welfare strategy. While wage increases remain important, they are clearly inadequate in isolation. A broader and more strategic focus on cost-of-living reduction, social protection, job security, and improved public service delivery will yield more meaningful and sustainable welfare outcomes.
“A comprehensive welfare framework anchored on structural reforms and strong institutions is imperative to improving workers’ quality of life and advancing inclusive economic growth.” Yusuf wrote.