Nigeria: Minimum wage | Salary increment may cause hyper inflation, World Bank consultant warns

“Though it is a problem that cannot be solved at short run but government can collaborate with workers now as a palliative to ensure that prices of such basic goods and services are within workers’ purchasing power without their having to demand general wage reviews from time to time.”

Ahmadiyya Times | News Watch | Int'l Desk
Source/Credit: Nigerian Tribune | Lagos
By Kunle Awosiyan | November 15, 2010

A renowned economist and World Bank consultant, Dr. Moshood Fashola, has warned that salary increment may lead to hyper inflation in the country.

He said this at the weekend while reacting to the clamour by the Nigerian Labour Congress (NLC) for minimum wage, saying that salary increment would not solve workers’ problems.

According to Fashola, who is also the Amir of Ahmadiyya Muslim Jamaat of Nigeria, an increment in salary without price control would result to hyper inflation that may be difficult for the Federal Government to address.

He said: “Although workers’ demand for such minimum wage is justified but it cannot solve the problem but worsen the welfare situation of the masses as it had done in the past.”


He said that unless the government could control prices of commodities, the salary increment being clamoured for by workers would force house rent, prices of commodities and services to go up with no increase in supply.

He said that other sectors who could not afford to review the salaries of their workers would shift the burden on civil servants with high prices of commodities.

He called on the leadership of the labour union to approach the minimum wage issue by forcing the government to lower the prices of commodities and goods.

“Though it is a problem that cannot be solved at short run but government can collaborate with workers now as a palliative to ensure that prices of such basic goods and services are within workers’ purchasing power without their having to demand general wage reviews from time to time,” he said.

According to him, wage increment that is not accompanied by commensurate rise in productivity is destructive to the economy in a competitive global environment.



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