The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, has explained that increasing the country’s minimum wage without corresponding productivity has serious economic implications for Nigeria.
Rewane stated this on Channels Television’s Business Morning segment of Sunrise Daily breakfast programme on Thursday.
He warned that increasing the country’s minimum wage from ₦30,000 without an increase in productivity is tantamount to printing more money which could cause inflationary pressure.
According to him, “The thing about the minimum wage is that it has serious implications when you increase wages by certain magnitudes, productivity is stagnant because of power and other infrastructural bottlenecks, and at the same time, you are compelled to begin to find out how to fund it (minimum wage) because an increase in wage without an increase in productivity, which is tantamount to actually printing money, has long time implications for the economy”.
Rewane highlighted that the productivity aspect in addition to output of the people is something important government should consider before taking any decision.
“It is something that we need to consider as the total wages paid in the country versus the productivity and output of the people, versus the wealth of the people”, he said.
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He further added that whatever decision the government is taking should be done as quickly as possible.
“Time is not on the side of Nigeria right now. It is an emergency. The Federal Government and everybody have to come together very quickly or else it goes out of hand”, he added.
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