The Central Bank of Nigeria (CBN) on Thursday said the proposed increase in minimum wage for Nigerian workers would stimulate output growth in the economy.
Godwin Emefiele, CBN governor, made this known in a communique published at the end of the 264th meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria in Abuja.
According to the communique, the MPC welcomed the moderation in inflation in October which according to the committee reflected declining food prices.
The committee added that it believes that given the negative output gap, “the proposed increase in the national minimum wage would stimulate output growth due to prolonged weak aggregate demand arising from salary arrears and contractor debt”.
“Consequently,” the communique said, “its impact on the aggregate price level would be largely muted, given that the monetary aggregates have largely underperformed in fiscal 2018.”
In addition, the MPC said the prevailing stability in the foreign exchange market would continue to moderate pressures on the domestic price level.
The Nigerian government and labour unions have been at loggerheads over the issue of minimum wage in recent time.
The governments at both federal and state levels are still negotiating over the proposed N30,000 minimum wage which the Tripartite Committee recommended to government.
Many state governors have since disagreed with the committee, saying they would not be able to pay else there would be mass retrenchment of workers.
On Wednesday, the development took a new turn when the organised labour said it would demand for two years arrears payment of the proposed new national minimum wage from the federal and state governments.
“Workers in the country have made tremendous sacrifice and I think going forward, we are going to demand for arrears of those two years we have lost,” said Ayuba Wabba, President of the Nigeria Labour Congress (NLC).
“Because I think with all fairness and justice, as they are going out to campaign we will also go out to campaign for our minimum wage.”
Meanwhile, the MPC in its communique also noted the improvements in the financial stability indicators, including non-performing loans, capital adequacy and liquidity ratios of the Deposit Money Banks (DMBs).
It urged the apex bank to sustain its surveillance over the banking industry by taking prompt corrective measures to further improve stability in the system.
The committee also called on the authorities to build significant buffers to strengthen the efficacy of monetary policy in the country.