About three months ago, the minimum wage in Nigeria was officially raised and from 30,000 to 70,000 naira and the reason given was due to the astronomical inflation currently in the country. While this seemed like good news for folks who probably knew little about finance and economics, I did have my reservations about this for some reasons which were based on common sense.
First of all, it was understandable that the inflation was just too much and people who could barely eat three square meals were now basically starving and begging for food to eat even once a day, and then even basic things like water were now so expensive. However, I felt the right approach was for the government to find ways to make the naira have more purchasing power rather than print and give out more money, particularly increasing the minimum wage by over a 100%.
Having observed how countries like the UK increased their minimum subtly and slowly, I expected those in leadership position in the country to learn and follow the same pattern and also look deep into the country’s economics to see how they can boost the purchasing power of the naira by taking steps like increasing production and manufacturing of products, reducing importation drastically, reducing dependence on foreign exchange, creating more job opportunities in the country, stabilising electricity and power, improving security of lives and properties etc. These ofcourse are long term goals that are capital intensive but would have a significant positive impact on the economy, but rather, the myopic leaders decided to chose the short cut and now that has contributed massively to the inflation in the past three months that can be observed in almost every area of the economy.
This isn’t very surprising as most of those in leadership positions got there not by merit but by connections, bribery and corruption. Decisions are taken without proper investigation and there are almost no consequences for poor decisions. I have family members and friends who are strongly affected by how the country is being run and its breaks my heart knowing the worse is still going to happen with the current administration still running the country and for the next 3 years most definitely. I can only hope and pray the current leaders think deeply about their actions, learn from developed countries and try to best to implement the good things they see that works for developed countries.
Feel free to share your thoughts on this.