Minimum Wage Increase Won’t Cause Inflation – TUC President

Modupe Ajetumobi

President of the trade union congress (TUC), Festus Osifo has said the much anticipated increase in workers minimum wage will not cause inflation in Nigeria.

Osifo said this in a recent interview on Channels Television’s Sunrise Daily. He justified the wage increase by pointing to the significant rise in revenue allocation to states since May 2023.

“We had a conversation with the managers of the sector. We said the issue of PMS price should not escalate beyond where it was then. We propose that the government give fuel importers a special rate for product importation. What is happening today is that there is a special concession for fuel importers. Because that is fixed, you see the price of PMS where it is today. If we had allowed that float with the rate of Naira at the FX market, PMS would be selling for over N1200 per litre. Due to the intervention we made, they managed it from the backend. You can call it Quasi-deregulation”, he said.

He highlighted that revenue from the Federation Accounts Allocation Committee (FAAC) to state governments has tripled over this period, providing states with ample resources for infrastructure development and other essential investments. Osifo underscored the importance of fair compensation for workers, stating that allocating funds to pay workers would not significantly impact inflation, as the money would be spent regardless.

Osifo’s comments come at a time of economic challenges, including the removal of petrol subsidies and the unification of exchange rate windows. It’s worth noting that the federal government recently approved a salary increase ranging from 25 percent to 35 percent for civil servants on the six consolidated salary structures.