- Central Bank of Nigeria (CBN) has thrown its weight behind the organised labour’s quest to increase the minimum wage
- CBN Governor, Godwin Emefiele expressed optimism that the proposed increase in the nation’s minimum wage would boost the economy through increased aggregate demand
- Emefiele reiterated that the economy’s recovery from recession was tepid and that efforts should me made to step up domestic aggregate demand
The Central Bank of Nigeria (CBN) on Thursday, November 22, threw its weight behind the organised labour’s quest to increase the minimum wage, saying that it would boost the economy, Vanguard reports.
Legit.ng gathered that CBN governor, Godwin Emefiele, disclosed the apex bank’s position while briefing the press on the outcome of the Monetary Policy Committee (MPC) meeting, in Abuja.
Emefiele, who warned Deposit Money Banks against lending to politicians or abetting money laundering as campaigns for the 2019 general elections, expressed optimism that the proposed increase in the nation’s minimum wage would boost the economy through increased aggregate demand.
Emefiele said: “Given the negative output gap, the proposed increase in minimum wage would increase aggregate demand, it will stimulate output growth after the prolonged weak aggregate demand which was due to salary arrears and contractor debts.”
On possible inflationary impact of increased money supply due to increase in minimum wage, the CBN boss stated: “It’s impact on aggregate price level would be likely muted, given that aggregate demand has largely under-performed in the fiscal year of 2018.”
Emefiele reiterated that the economy’s recovery from recession was tepid and that efforts should made to step up domestic aggregate demand through banks giving more access to credit to high employment generating sectors, with particular emphasis on Small and Medium Enterprises, (SMEs).
The CBN governor said this would be achieved with improvement in productivity in both the oil and non-oil sectors of the economy, improvement in harvest, exchange rate stability and addressing security challenges across the country.
According to Emefiele, the downside of the economic outlook, would include reduced portfolio investment inflows, absence of fiscal buffers, low domestic credit and weak aggregate demand.
However, he added that there would be an increased inflationary pressure towards the end of the year, largely due to consumer spending for the Christmas festivities, election-related spending and increased spate of implementation of the 2018 Federal Government budget.
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Legit.ng previously reported that a labour leader, Joe Ajaero, said that labour has resolved to fight for the new minimum wage even after the upcoming general election, saying that there would be no retreat or surrender until workers received the wage.
Ajaero, who is the president of the United Labour Congress (ULC) made the statement when he spoke at a public forum on labour in Lagos on Thursday, November 22.
He stated that a tripartite committee had considered the ability of government to pay the sum before the committee agreed on the sum. The ULC president insisted that government has no option than to pay the N30,000 minimum wage and then follow up with payment of arrears.
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Minimum Wage: Is N30,000 Too Much for FG to Pay Workers? - Nigeria Street Gist | Legit TV
Source: Legit.ng
