By Lillian Okenwa
Earlier in the year when a Tripartite Committee on National Minimum Wage was set up to recommend a new national minimum wage for Nigerian workers in the public and private sectors, Premium Times in an editorial titled: “Federal Government’s profligacy amid a bile of hunger and misery,” expressed grave concern that in the face of stinging suffering and distress, the Federal Government continues to show scant regard for the pains of its citizens.
“The process leading to the inauguration of a tripartite committee to fix a new minimum wage, has further exposed the dark side of the government in the use of resources. A leaked memo which originated from the office of the Secretary to the Government of the Federation (SGF), George Akume, showed President Bola Tinubu’s approval of N500 million for the launch, in the face of blistering hyper-inflation, waves of public protest over hunger and ravages of misery across the country. The action is as reckless as it is feckless.
“How the money was spent, as public funds, should be fully explained. If renting a hall for the inauguration of the 37-member committee was the reason for the expenditure, the 50-seater banquet hall in the Presidential Villa, built with N2.2 billion by the Goodluck Jonathan administration, or the International Conference Centre, Abuja, should have served the purpose. There is abundant evidence of a streak of profligacy or abuse of public funds since the Tinubu administration assumed office on 29 May, 2023. This runs against the grain of his Renewed Hope mantra,” Premium Times said.
Writing for Africanews, James Oludare Eshokeme and David Agunloye Taylor noted that: “Africa’s most populous country Nigeria is facing its biggest economic crisis in decades, with the number of impoverished Nigerians rising.
“The free fall of the naira and an alarming surge in the cost of living caused the rise from 89.8 million at the beginning of 2023 to 104 million, according to the World Bank’s Nigeria Development Update report.”
Notwithstanding this situation where mental health experts and advocates have warned that Nigerians are being pushed to the brink, leading to deep anger, anxiety, stress and depression levels, the Monetary Policy Committee of the Central Bank of Nigeria has increased the benchmark lending rate to 27.65 per cent.
The hike in the Monetary Policy Rate was disclosed by the Governor of the CBN, Olayemi Cardoso, at the end of the 296th MPC meeting in Abuja on Tuesday.
The MPC had maintained a hawkish stance to tame inflation since it resumed meeting this year and thus far, it has hiked rate by more than 500 points. The rate was raised to 26.25 per cent in May.
However, with inflation moving to 34.19 per cent in June, according to the National Bureau of Statistics, the headline inflation increased by 0.24 per cent relative to the May 2024 headline inflation rate which was 33.95 per cent.
On a year-on-year basis, the headline inflation rate was 11.40 per cent points higher than that of June 2023 (22.79 per cent).
Also, on a month-on-month basis, the headline inflation rate in June 2024 was 2.31 per cent, which was 0.17 per cent higher than the rate recorded in May 2024 (2.14 per cent) meaning that the rate of increase in the average price level was higher in June than in May.
Repeatedly, the CBN governor has maintained that the MPC members were committed to price stability and were willing to keep tightening until inflation is tamed.
Multiple reports from investment houses had projected that the MPR would be hiked,
Cowry Asset Management, in its weekly report, projected a 25bps to 50bps hike in interest rates, while the Meristem report anticipates “a 100 basis point increase in the monetary policy rate to 27.25 per cent while likely keeping other parameters unchanged. Overall, we anticipate that the committee will prioritize inflation control and capital inflow sustainability, crucial for maintaining a stable exchange rate system, and accordingly, implement a rate hike to achieve these objectives.”
Additional report from PUNCH
