South Africa’s President Cyril Ramaphosa has signed into law the national minimum wage bill of R3, 700 (N126, 480) into law even as Nigeria argues back and forth over a proposal to pay N30, 000 per month.
The president said the move was part of efforts by the government to tackle wage inequality in Africa’s most industrialised economy.
The National Minimum Wage Act sets South Africa’s minimum wage at 20 rand ($1.45) an hour, equal to 3,500 rand per month. The law will come into force on a date to be determined by Ramaphosa, the presidency said.
Ramaphosa said the wage, which would come into effect January 1, 2019, would benefit about six million workers that currently earn R3, 700 (N97, 495).
One South African Rand exchanges for N26.35. This means South African workers would be earning N527 per hour: N4, 216 per day and N126, 480 per month while their Nigerian counterparts currently earn N75 per hour, which is N600 per day (at eight working hours per day) and N18, 000 per month.
Supporters of the minimum wage say it will reduce inequality and stimulate economic growth as workers spend more.
But critics say it could lead to increased unemployment, already at record highs, because some employers won’t be able to afford higher wage bills.
Thousands of union members protested against the proposed minimum wage in April, saying it was too low.
Ramaphosa’s office said in a statement that while the national minimum wage will not end income inequality, it was a first step towards addressing the clamour for a living wage.