New Minimum Wage May Worsen Inflation- CBN Deputy Governor Warns


The Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability Directorate, Philip Ikeazor has said that the new minimum wage negotiation may frustrate the bank’s monetary policy effort to tame inflation.

The deputy governor said this in his personal statement at the last monetary policy meeting seen by NewsNGR.

Inflation rose to 33.69 per cent in May 2024 despite the monetary policy rate hike which was raised to 27.25 per cent in May 2024.

The federal government had proposed N62,000 but the labour unions are insisting on N494,000 minimum wage.

Ikeazor said that the ongoing minimum wage discussion would be counterproductive to the monetary policy stance of the apex bank.

Ikeazor said, “Besides, monetary stance needs to be proactive, considering the consequences of inflation and inflation expectation on the ongoing wage floor negotiation and the consumer credit scheme, both of which could reshape the efficacy of monetary policy.

“It is, therefore, important to set in motion a monetary policy stance that will counteract the effects of these credit and income policies on the transmission mechanism of monetary policy.”