According to Bismarck Rewane, Managing Director of Financial Derivatives Company Limited, Nigeria’s economy would suffer greatly if the minimum wage were raised without a comparable increase in productivity.
Rewane made this statement on Thursday’s Business Morning portion of Sunrise Daily, a daily show on Channels Television.
He cautioned that raising the minimum salary in the nation from ₦30,000 in the absence of a rise in productivity would be the same as creating more money, which would lead to 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 emphasised that before making any decisions, the government should take into account both the productivity factor and the production of the populace.
“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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