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Fear of Inflation Mounts as Buhari Approves New Minimum Wage

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  • Fear of Inflation Mounts as Buhari Approves New Minimum Wage

As workers and their unions celebrate the N30,000 new minimum wage approved by President Muhammadu Buhari yesterday, analysts have expressed fear that the fresh wage regime could put inflationary pressure on the already fragile economy.

Those who spoke said the 60 per cent minimum wage increase was likely to lead to a general increase in prices of goods and services in the short-term.

One of them, the Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, pointed out that the wage hike would lead to inflationary pressures.

He said, “Productivity growth in Nigeria is still minus 0.7 per cent. So, an increase in the minimum wage and all other increases that would follow and it means that basically inflation is likely to increase.

“Our projection is that inflation will go from 11.5 per cent to around 13 per cent because of the wage increase.

“If you add the election spending and the promissory notes the government has issued for contractor debt of N483 billion; when we add the money supply of the contractor note, the minimum wage and negative productivity, you have an inflation.”

When asked about the likelihood of an interest rate hike, he said, “Not really, because there is a transmission time lag between when money supply rises and when prices rise.

“The transmission time lag is between three and six months.”

Buhari had received the report of the National Minimum Wage Tripartite Committee yesterday in Abuja and approved the new figure, effectively ending the first phase of the workers’ struggle for pay increase.

Receiving the report of the committee from its chairman, Ms Amal Pepple, in the Council Chamber of the Presidential Villa, Buhari told members of the committee, the organised labour and government representatives that henceforth, he would put the machinery in place for the transmission of the new National Minimum Wage Bill to the National Assembly.

The president, who said he was committed to seeing the new wage come into fruition, chronicled all the events leading to the final resolution, saying he was regularly briefed on updates on the negotiations.

Promising that the government would continue to engage the organised labour wherever necessary, Buhari thanked all who participated in the process.

However, he counselled the organised labour not to allow themselves to be used as political weapons by politicians.

He said, “In a way, both arguments are valid. I want to assure you all that we will immediately put in place the necessary machinery that will close out these open areas. Our plan is to transmit the Executive Bill to the National Assembly for passage within the shortest possible time.

“I am fully committed to having a new National Minimum Wage Act in the very near future.

“Let me use this opportunity to recognise the leadership of the organized labour and private sector as well as representatives of State and Federal Governments for all your hard work. The fact that we are here today, is a notable achievement.

“As the executive arm commences its review of your submission, we will continue to engage you all in closing any open areas presented in this report. I therefore would like to ask for your patience and understanding in the coming weeks.

“May I therefore, employ workers and their leaders not to allow themselves to be used as political weapons.’

In her submission, Pepple narrated how the decision to finally peg the minimum wage at N30, 000 was arrived at.

She also reported that the draft of the New Minimum Wage Bill that would be sent to the National Assembly had already been produced.

Pepple explained, “To arrive at our recommendation, the committee carefully weighed the demand of the Nigerian workers, which was predicated on the high cost of living occasioned by unfavourable exchange rate and rising inflation over the past few years, among other factors.

“The committee also considered the overall macro-economic indicators, including the revenue and expenditure profile of government as provided by the Ministers of Budget and National Planning and Finance as well as the minimum wage proposed by some state governments in their memoranda submitted to the committee.

“Consideration was also given to the critical role of the informal sector in employment generation and the need for a realistic minimum wage that will not stifle the growth of the sector and the overall economy.

“After carefully weighing these critical factors and bearing in mind the overriding interest of the economy, the committee, while noting the offer of N24,000 by the federal government, is recommending an increase in the existing minimum wage from N18,000 to N30,000.

“We believe that the implementation of the recommended minimum wage, will, no doubt, boost the purchasing power of workers, increase consumption expenditure and ultimately stimulate business and overall economic growth.

“The committee has also produced a draft national minimum wage bill 2018 for condition by government.

“We strongly believe that the enactment of the draft bill into law is very critical to the operation and future reviews of the national minimum wage.”

National Assembly Receives Three-year MTEF

Meanwhile, the president has submitted a three-year (2019- 2021) Medium-Term Expenditure Framework and Fiscal Strategy Paper to the Senate for approval.

He also submitted the same proposal to the House of Representatives for expeditious consideration.

Buhari had in an October 29 letter titled ‘Submission of 2019-2021 Medium-Term Expenditure Framework And Fiscal Strategy Paper’ addressed to Senate President Bukola Saraki and read at plenary by Saraki yesterday stated that he was sending the fiscal strategy paper based on the provisions of the Fiscal Responsibility Act, 2007.

According to the president, the preparation towards submission of the 2019 budget to the National Assembly is progressing well.

The Medium Term Expenditure Framework, MTEF and Fiscal Strategy Paper, the President explained, “were prepared against the backdrop of a generally uncertain global economic environment; as well as fiscal challenges in the domestic economy to ensure that planned spending is set at prudent and sustainable levels and is consistent with government’s overall developmental objectives and inclusive growth”.

While canvassing for an expeditious approval of his proposal, Buhari said, “I hereby forward the 2019-2021 MTEF and FSP to the Distinguished Senate and trust that it would be expeditiously considered in order to bring the 2019 FGN budget preparation process to timely closure.”

At the House of Representatives, Speaker Yakubu Dogara, read a similar letter at yesterday’s plenary

The MTEF, which was approved by the Federal Executive Council (FEC) meeting of Wednesday, October 28, had proposed a $60 oil price benchmark, 2.3 million barrels per day at $305/$1 exchange rate and 3.01 per cent GDP growth rate for the 2019 budget.

The FEC, according to Minister for Budget and National Planning, Senator Udo Udoma, approved a proposed N8.73trillion budget for 2019 fiscal year, which is N400 billion less than the N9.12trillion approved for 2018 fiscal year.

Also yesterday, Saraki read out a letter dated October 24 from Buhari requesting for the confirmation of the appointment of Hon. Abike Dabiri-Erewa, as the Chairman/ Chief Executive Officer of Nigeria Diaspora Commission in compliance with Section 2(1) of the Nigeria Diaspora Commission (Establishment) Act, 2017.

The president also sought Senate confirmation of Mr. Chidi Izuwah as Director-General of Infrastructure Concession Regulatory Commission and the substitution of Chief Olabode Mustapha with Mrs. Ronke Sokefun as Chairman of the Nigerian Deposit Insurance Corporation, (NDIC).

A six- man governing board of the National Bureau of Statistics (NBS), headed by Dr Kabiru Nakuara was also presented to the Senate by the president for confirmation in compliance with Section 8(2) a & j of the Statistics Act, 2010.

The Senate also yesterday approved the establishment of two federal polytechnics and two colleges of education in various parts of the country.

This was sequel to the presentation of the reports of the Chairman of the Senate Committee on Tertiary Institutions and TETFUND, Senator Jibrin Barau (Kano North), calling on the Senate to approve the establishment of the higher institutions.

The institutions include Federal Polytechnic in Aba, Abia State and another one in Selami in Sokoto State.

The others are Federal College of Education in Gumel, Jigawa State and Sabon Birini in Sokoto State.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Transcorp Hotels Expand into Marketplace, Launches Aura to Connect People, Hoteliers, Others

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Transcorp Hotels Plc, on Thursday, announced it has launched a new digital platform, Aura, through which people can book accommodation, restaurants and experiences.

Aura, Transcorp’s first in the alternative accommodation segment, is part of the company’s asset-light model, leveraging technology to deliver true hospitality, exciting experiences, and drive shareholder value.

It’s a new dawn in the hospitality industry! I am thrilled to introduce you to Aura by Transcorp, the digital platform we are using to connect people to quality accommodation, great food, and awesome experiences,” Managing Director and Chief Executive Officer of Transcorp Hotels Plc. Dupe Olusola said.

For more than 30 years, Transcorp Hotels Plc has been at the forefront of creating a superior guest experience at our locations. Today, our commitment to innovation has offered us an opportunity to extend this beyond the hotel premises,” Olusola added.

The launch of Aura by Transcorp is one of the most significant developments in the company’s history as it seeks to transform the travel and tourism industry in Africa by focusing on three important components of travel, whether for leisure or business — where you stay, what you eat and how you spend your time. With its people-driven hospitality model, Aura is set to revolutionise travel and help remind Africans of our deep history of hospitality.

Speaking on the launch of Aura, Obong Idiong, Chief Executive Officer at Africa Prudential Plc, Aura’s technology partners, expressed his excitement. “Finding the right accommodation when you travel can be incredibly complex. Options available for the right prices are often limited, and travellers sometimes end up with accommodation that taints the travel experience. Transcorp Hotels Plc has been able to fix that with Aura and we are proud to be associated with them.”

To ensure topnotch user experience, we built a solution to drive digital transformation through the adoption of shared living spaces for the Aura business. With an advanced search algorithm powered by artificial intelligence, Aura determines the relevance of locations taking into consideration, the customers’ preferences and requirements to meet them at the point of their needs,” Idiong added.

Priscilla Adeboye, a travel enthusiast and early adopter of Aura, said the global pandemic has pushed international travel down her list. “But I still want to be able to take some time off work or spend a weekend away from home with the family. I have found incredible homes on Aura that meet my need for space and privacy.

 

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Siemens Energy Nigeria Appoints Seun Suleiman as Managing Director

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Seun Suleiman is the New Managing Director of Siemens Energy Nigeria

Mr. Seun Suleiman is the new managing director of Siemens Energy Nigeria, the company announced on Wednesday.

According to the statement released by the energy company, Suleiman will be responsible for the entire management of operations and decisions on business policies and corporate strategy.

Commenting on his appointment, Suleiman said, “It is an absolute honor to lead the business for Siemens Energy Nigeria and I look forward to delivering on the brand’s promise of excellence.

Suleiman joined Siemens Energy in 2014, bringing over 15 years’ experience and deep expertise in the private sector across Europe and West Africa.

The statement said, “He is an accomplished business strategist and success-driven leader with strong business acumen. Suleiman has also been a core member of the executive management team at Siemens Energy serving in roles as Sales Director West Africa – Service Distributed Generation Oil & Gas and Vice President Service & Digital.

“Prior to this, he also held various functional and managerial positions with ABB Ltd UK, ABBNG Nigeria, Schneider Electric Nigeria and Dresser-Rand Nigeria Ltd.

It added that Suleiman was experienced in establishing operational excellence with specific competence in the power, oil and gas sectors.

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FG Reopens Osubi Airport Warri for Daylight Operations

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FG Reopens Osubi Airport Warri for Daylight Operations

The Federal Government on Monday said the Osubi Airport in Warri has been reopened for daylight operations.

The Minister of Aviation, Hadi Siriki, disclosed this in a tweet.

The airport was closed in February 2020 over mismanagement and debt allegation involving aviation service providers and airport management.

However, Oberuakpefe Afe, a lawmaker representing Okpe/Sapeie/vaie federal constituency, recently moved a motion for the Federal Government through the ministry of aviation and relevant authorities to reopen the airport for flight operations.

On Monday, Hadi Siriki said “I have just approved the reopening of Osubi Airport Warri, for daylight operations in VFR conditions, subject to all procedures, practices and protocols, including COVID-19, strictly being observed. There will not be need for local approvals henceforth.

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