While there may be jubilation among the Nigerian workforce over the implementation of the new ₦70,000 national minimum wage, a United States-based compensation and public finance expert, Olayinka Afolabi, has cautioned that the increase may not be enough to cushion the impact of Nigeria’s rising cost of living unless it is accompanied by a comprehensive review of the country’s public sector salary structure.

Afolabi spoke virtually at an expert session convened to dissect the implications of the new minimum wage on Nigeria’s public service compensation system, where economists, compensation specialists and public finance professionals examined the long-term sustainability of the policy.

Speaking from the United States, the Compensation Analyst with the Montgomery County Government, Maryland, described the wage increase as a positive step but warned that inflation could quickly erode its purchasing power.

“The ₦70,000 minimum wage is certainly a welcome development and workers deserve to celebrate it. However, the reality is that with the current inflationary trend and the rising cost of transportation, food and other essential commodities, the value of that increase could diminish very quickly if government does not address the broader compensation structure,” She said.

A Fellow of the Association of Chartered Certified Accountants (FCCA) and Georgetown Policy Management Professional, Afolabi argued that the implementation of the new wage should automatically trigger a review of the Consolidated Public Service Salary Structure (CONPSS), which determines salaries across the federal civil service.

“Minimum wage reforms should never stop at the entry level. Public sector salaries are built on a structured hierarchy that reflects qualifications, responsibilities and years of experience. Once the minimum wage changes, every grade level should be reviewed to preserve fairness and maintain the integrity of the salary framework.”

According to her, failure to adjust salaries across all grade levels could lead to salary compression, where the earnings gap between junior and senior officers narrows significantly.

“When experienced officers see little difference between what they earn and what newly recruited workers receive, you weaken motivation, reduce morale and undermine the incentive for career progression within the civil service.”

Afolabi said governments across the world often combine minimum wage increases with broader compensation reviews to maintain internal equity, adding that although Nigeria and the United States operate under different labour systems, there are valuable lessons to be learnt.

“The lesson is not to copy another country’s model wholesale, but to adopt sound compensation principles—periodic salary reviews, stakeholder engagement, fiscal planning and evidence-based decision-making.

Those are universal.”
She also warned that any wage adjustment must be supported by strong fiscal planning to prevent additional pressure on government finances.

“Salary increases must be sustainable. Government should conduct proper fiscal impact assessments and strengthen revenue generation so that improved worker welfare does not come at the expense of public service delivery.”

The compensation expert maintained that the current reform presents an opportunity for Nigeria to modernize its public sector compensation system by institutionalizing transparent salary review mechanisms that reflect inflation, economic realities and productivity.
“The conversation should not end with ₦70,000. What Nigeria needs is a compensation system that evolves with economic conditions, protects workers’ purchasing power and remains fiscally responsible. That is how you build a motivated and productive public service,” She said.