There’s news, although unverified, that has been trending since last weekend that the federal government is considering increasing the minimum wage to N200,000 a month. I, in all honesty, do not believe this news to be true but let us even assume that there is an atom of truth in it, increasing the national minimum wage is not the right step to be taken by the federal government. It will not solve any problem, rather it will further fan the amber of inflation.
The federal government in unverified news also claimed that they want to distribute 8000 naira to twelve million families as a palliative to cushion the effect of the economic hostility. They have scratched this plan as they are no longer moving forward with it, maybe they found out by themselves or listened to some of us that it is also a very wrong and nasty move.
No matter how much you earn as an individual and no matter how much you are given as a financial palliative by the government, if your cost of living is high you will always remain broke; the best policy to implement are policies that will reduce the cost of living; everything should be geared towards reduction of the cost of living and not to increase minimum wage. No matter how much increment in salary an employee gets, if things are still very expensive and constantly on the rise, the money will never be enough. This is why in financial management you are thought that if your expenditure or your cost of living is above your income you will always be broke and in debt
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Even if the government are serious about increasing the minimum wage, it may only favour the civil servants at the federal level and civil servants of some states because another problem that will likely arise will be how the federal government will ensure or enforce that the minimum wage be increased across the board, especially at the private sectors which are the highest employers of labour in Nigeria.
Increasing the minimum wage will never solve the problems, reducing the cost of living will be the best step. The question is how then will the government reduce the cost of living?; by opening borders for more importation of consumer goods, reduction of taxes on consumer goods, removal of import restrictions, reduction of import clearance fees on essential commodities, easing the cost of doing business in Nigeria, etc. They are this simple, direct and straightforward.
If we are being honest, things to do to make Nigeria’s economy start recovering speedily are not rocket science, they are simple economic moves but due to the complexity of the Nigerian political space and the bureaucracy involved in everything it does take time to be implemented and some greedy politicians will rather frustrate the plan to implement any policy that will make the economy work if it is not favouring them directly.
People defending this government are making the excuse that the government just started and making the economy work is not going to be an overnight miracle, but the government is just a few days away from completing a whole two months in office and there is nothing to show for it yet, there is no sign that they are making any move in the right direction rather they are using trial and error form of governance.