High inflation, soaring living costs push labour, employers to breaking point — NECA

…Says inflation erodes paychecks, heightens labour tensions

By Victor Ahiuma-Young

The Nigeria Employers’ Consultative Association, NECA, has raised the alarm over the deepening impact of high inflation and rising living costs on workers and businesses, warning that the country’s industrial relations system is nearing a breaking point.
Director-General of NECA and member of the International Labour Organization, ILO, Governing Body, Mr. Adewale-Smatt Oyerinde, said in a policy statement that the inflation crisis has eroded workers’ purchasing power, intensified wage disputes, and heightened labour tensions across key sectors.
According to him, “High inflation has severely eroded workers’ purchasing power, making wage disputes more frequent, urgent, and difficult to resolve, as employers face parallel hikes in operational costs.”
He noted that the economic pressure created by recent macroeconomic policies, especially the removal of fuel subsidies, has placed unprecedented stress on both workers and employers.
Oyerinde lamented that rather than focusing on enterprise-level collective bargaining, many unions are now compelled to embark on nationwide protests over economic survival.
According to him: “Labour unions often prioritize national economic protests—such as general strikes against government policies—over specific workplace negotiations, blurring the lines between political activism and industrial relations.
“The traditional framework of collective bargaining is being overshadowed by national economic grievances, escalating local disputes to the federal level.”
The NECA DG warned that the persistence of high inflation without corresponding social protection or wage adjustments could push Nigeria into deeper industrial chaos. “Our industrial relations system, IRS, is currently floundering due to institutional erosion and economic strain. The immediate trajectory points toward greater conflict and instability,” he said .
Oyerinde, whose organization serves as the umbrella body for employers in Nigeria, said that businesses are also struggling to stay afloat under the harsh economic climate.
“Employers are equally hit by the rising cost of production, energy, and imported inputs. Many are finding it increasingly difficult to sustain wage increments amid shrinking margins,” he said.
He urged the Federal Government to act swiftly to ease economic pressures and strengthen the nation’s industrial relations framework.
Oyerinde advised that “Government must utilize savings from reforms such as subsidy removals to build robust social safety nets that cushion the impact of inflation on vulnerable workers.
“Frontally addressing challenges around transportation, food security, healthcare, free and qualitative education, and housing will reduce pressure on households.”
Oyerinde also advocated a shift in wage policy from mere cost-of-living adjustments to productivity-linked pay systems, saying “It is time to focus collective bargaining and minimum wage negotiations on productivity-based parameters. This will ensure that wage increases are sustainable for businesses while protecting workers from economic shocks.”
He emphasized that while employers are not opposed to discussions around living wages, such conversations must be anchored on realistic global standards. “Employers are not averse to the conversation on a living wage. But there is need to allow the International Labour Organization to arrive at an agreeable global parameter to determine it,” he said
The NECA DG reiterated that unless urgent reforms are implemented to stabilize the economy and restore confidence in industrial institutions, Nigeria could face widespread workplace unrest.
“Without economic stability and enterprise sustainability, decent jobs will not be created, the economy will not grow, and citizens will be hard-pressed,” he cautioned.
Oyerinde called for stronger enforcement of labour laws, faster passage of the pending Labour and Employment Bills, and renewed government commitment to social dialogue.
“It is regrettable that after years of tripartite review, the Labour Bills have not been considered or passed into law. This neglect reflects poorly on our commitment to international labour standards,” he said.
He added that Nigeria, having ratified 44 ILO Conventions—including ten fundamental ones—“walks precariously on the path of ridicule in the comity of ILO member states” if it continues to neglect key labour reforms.
Oyerinde concluded with a call for shared responsibility among all stakeholders.
“The future of Nigeria’s economy depends not only on sound fiscal policies but also on a fair, predictable, and inclusive industrial relations framework—one that prioritizes cooperation, consultation, and respect for the rule of law,” he said.

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