Industry experts and financial analysts have hinted that the economy is on a tough road to recovery, adding that the minimum wage agitation and return of subsidy had further complicated the process and prospect of early recovery.
Speaking on the prospects of the economy, Tajudeen Olayinka, Investment Banker & Stockbroker said: “Re-emergence of fuel subsidy and the fact that the economy has lost its purchasing power, are clear indications that the economy is failing to adjust along the lines of set parameters.
‘’The economy cannot afford a return to subsidy regime in any guise, more so, with the current agitation for minimum wage by organised labour.
“I think government and economic team will need to put on a thinking cap because what will worsen the current economic situation is allowing labour leaders to mislead government into setting a minimum wage that appears to be chasing inflation.
“You do not chase inflation with minimum wage, rather, you deploy all available resources to cause inflation to moderate to a minimum wage level that is affordable to the economy.
“Organised labour must show a good understanding of the problem that has befallen our nation. Any minimum wage level above N60,000 could spell doom for the economy.’’
However, Prof. Omowumi Iledare, a professor of Petroleum Economics and Policy Research, disagreed with increment in workers’ wages as a solution to weak purchasing power.
He stated: I don’t think spending nearly a quarter of the budget to reintroduce subsidy payments in petrol is the way to go. There are also other ways to improve the welfare of the society than high wages in an inflationary economy with a usually low productivity.
‘’First, embrace the rule of law as a nation. Second, tax less and spend borrowed fund for infrastructure and promote transparency and accountability.”
