Minimum Wage Review Will Not Ease Hardship If FG Fails To Fix Economic Problems — Alaje

Nigeria’s economic hardship has become a a major issue for the less-than-a-year-old administration of President Bola Tinubu and experts like the Senior Partner of SPM Professionals, Paul Alaje have argued that minimum wage review or release of food from reserves will not solve the current crisis.

The labour unions led by the Nigerian Labour Congress and the Trade Union Congress are bargaining with the federal government for a wage increase while the spike in food prices has led to the call on the Nigerian government to release food from its reserves.

Last week, the Minister of Budget and Economic Planning, Abubakar Bagudu spoke on plans to close the borders and open food reserves to bring down the high prices.

Since Tinubu took over office, inflation has risen from 22.41 per cent in May 2023 to 28.9 per cent in January 2024. Food inflation rose from 24.82 per cent to 33.93 per cent by January this year.

Alaje said, “The way out of the current scarcity and hardship is the supply side. No matter the increased salary (this does not mean salaries should not be increased), if we don’t solve the supply-side issues. It would mean we are beating around the bush.

“The release of food from the strategic reserves will reduce the impact for 1 to 3 months only. Our best bet is the supply side.”

Recently, the International Monetary Fund (IMF) advised the government to remove subsidies on electricity as part of the reforms which it says are needed to revamp the plagued economy.

But Alaje argued that Nigerians are already facing severe hardship and further attempts to remove electricity subsidies will double their plight.

Alaje said, “Some international organizations have stated that Nigeria is facing a worsening economic crisis as a result of policy. They are now advising the Nigerian government to remove all forms of subsidies including electricity subsidy among others.

“I can only smile. If we try this, trust me, the current hardship will multiply by two at the minimum. Recall that I advised in December that we must do the needful within 12 calendar months. It is just two months and the hardship is already unbearable for many. The days ahead are going to be interesting.

“Removing any form of support will cause further disequilibrium and damage to the system.”