CBN states position on New Minimum Wage, reveals effect of N30,000 increase

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.
The communique read: “The MPC welcomed the moderation in inflation in October, reflecting declining food prices. The Committee 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, 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 prevailing stability in the foreign exchange market would continue to moderate pressures on the domestic price level.”

The MPC appraised recent developments in the global and domestic macroeconomic and financial environments, as well as the economic outlook in the first half of 2019.
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.