Governor Godwin Obaseki of Edo State has clarified the rationale behind the increase in the minimum wage in the state to N70,000, stating that it reflects the current economic conditions in the country.

Obaseki’s announcement of the N70,000 minimum wage sparked discussions nationwide, but he emphasized that with the declining value of the naira and the soaring cost of living, it was necessary to adjust the minimum wage for state workers.

“In 2011, when the minimum wage was N18,000, the exchange rate was N160/$, so effectively workers in Edo State were taking home about $120 as minimum wage,” he explained during an appearance on Channels Television’s Politics Today.

“Today, in 2024, with the N70,000 minimum wage at the current exchange rate of N1,257/$, what they are taking home is $55, which is less than 50 per cent of what they were earning about a year ago.”

He stressed that the issue is about productivity, aiming to pay workers adequately to enhance their output, rather than offering salaries that do not motivate them to produce effectively.

Obaseki acknowledged the challenges posed by the removal of fuel subsidy and the floating of the nation’s currency, leading to a drastic increase in the cost of living and inflation rates reaching a 28-year high of 33.20 per cent.

To alleviate the impact of the harsh economic conditions, Obaseki stated that his government had to introduce the new minimum wage for workers in Edo State.

Additionally, he highlighted efforts to digitize work processes and reduce government expenses, channeling the savings into the payment of salaries.

“We don’t spend [so much] money on stationery and all those costs used to run the government,” he noted, adding that alternative energy sources have been explored to cut down on energy costs.

“Those savings, I use them to pay salaries,” he concluded.