Olukat:
Are they still campaigning?
When will this "16 years" narrative end?
I hope these brainless e'idiots don't do to Tinubu what they did to Gen. Buhari

They are doing it already.
One sent me a WhatsApp broadcast that Tinubu has reduced cost of flight tickets. I just dey laugh 🤣😅

Life was generally good under PDP and we didn't have this crazy inflation but I remember that Jonathan increased minimum wage and corpers allowance

grandstar:


If you want me to do likewise for the Buhari's 8 year rule, please let me know.

You should have done it for Buhari's admin without adding that epithet.

For consistency, do it at the parallel market rate.

Nigeria has fallen into a vicious cycle since the 2014 drop in oil price. The new minimum wage will not be much higher than the current min wage in $ terms because Tinubu will simply devalue the exchange rate to pay for the increase.

I'm of the opinion that is a secondary reason why he hasn't unified the rates just yet. In addition to the expected increase in gasoline prices.

If he devalues from N460 to N1000. He'd be able to pay 80K minimum wage. Rent of 200K would become 500K. Tuition fees in federal universities will cross 300K. Lagos to Abuja Economy flight ticket will be N120K one-way, 250K two-way; Premium will 300K one way, 600K two-way. iPhone of 850K will become 2m. Starting rates for beat-up, barely road-legal cars from 25 years ago will be 3m. National budget will be N50T.

But I guess everyone will have a win. Tinubu will claim he raised the wages. The union leaders will claim they got results. The average worker will see more digits in their bank account balance. But in real terms, nothing will have changed besides the inequality gap getting wider. And you know what, the populace deserves it.

If you are an adult and can be bamboozled by the categorically false socialist "higher minimum wage = higher standard of living" trope like an impressionable toddler who prefers more notes of lower denomination to few notes of higher denomination; then you surely deserve to live like a dreg.

We've been down this road too many times to mention. Every generation with more "education" becomes verifiably dumber. And political commentators like yourself rely on the hoi polloi's severe misunderstanding of economic principles to push your agendas.

-Lord

franugo:


How is 100k realistic? Realistic minimum wage now would be 50-60k. It's all well and nice to peg the minimum wage at 100k, but how many state governments can pay that without fail?

You have a valid point.

jmoore:
APC is a lying machine with gull¡ble zomb¡e supporters that can't reason on their own.

PDP was a stupid machines. Economy was bumming then, Nigeria was prosperous, they have no excuses not to increase the minimum wages and make Nigeria a better nation but they scoundrel the opportunity n embezzled and wasted the resources without any investment. It was bad during APC but worst during PDP.

dre11:


https://dailytrust.com/fact-check-was-minimum-wage-stagnant-during-pdp-16-years-as-claimed/

See how people are killing themselves over a comments made by a mere twitter user - someone that could be a mischief maker, and could belong to any party. We just pick on anything these days and turn it into a topic for debate.

Acekidc4:
We don't care whether PDP increase or decrease minimum wage, what we are concerned about right now is that President Tinubu the Jagaban of Africa, the Grandaddy of their Fathers Mothers should Increase the Current Minimum wage from 30k to about 70k to 90k. At least thats still very Viable.

There is a But, which is INFLATION. How do we go around it??

You hyped buhari even more than this, but today nkor? Egg that was 30 naira in 2015 is now 100-150 naira. Yinmu.

A Failure will always defend a failure...worst government in the history of Nigeria

Increase of minimum wage is completely irrelevant.What is important is moving from consumption to production.
Not much money chasing few goods that will lead to hyper inflation.

Acekidc4:
We don't care whether PDP increase or decrease minimum wage, what we are concerned about right now is that President Tinubu the Jagaban of Africa, the Grandaddy of their Fathers Mothers should Increase the Current Minimum wage from 30k to about 70k to 90k. At least thats still very Viable.

There is a But, which is INFLATION. How do we go around it??

That is the point. I have raised numerous concerns in national daily articles about this issue. The solution is not increase in minimum wage but Decrease in Maximum wage earnable. Lowering the maximum wage significantly will lead to Deflation. Therefore, the minimum wage would acquire significant purchasing power, even as it is today. Once you raise the minimum wage to say 70k or 100k, everything else rises - transportation, prices of goods. In some cases there is even a downward pull on the new wages following all round increment in services. You are in effect carrying more money which has not increased your purchasing power.

Price control is dead in Nigeria, why? Majority of Nigerians suppliers dont even like the idear. If a price is set by the government , dey will start hoarding their goods, which will eventually lead to scarcity. People will start patronising the black market.

The government is still the best hope, they need better policies. They really need to understand Nigerian market. For example the increase in Dollar...all transactions should be done in our local currency, all those schools, houses for sale/rent etc should be in Naira not in Dollar. CBN and Aboki should buy/sell dollar same rate.

For Gods sake we re the only top producing oil country with no refinery. GOD help us our refineries start working....we should start selling our crude in Naira.

I feel if we can do these, atleast things go better, alot of work still to be done to kill inflation....the obvious is if there is stable electricity, no Nigerian will be thinking of buying fuel for gen, better transport system (Train) to transport goods and passengers...all these fuel tankers and trailers, private cars will reduce on our roads...cheaper commodities and out roads will last longer...and train transportation price can be easily controlled.

Finally, we have to re-orientate our Manufacturing sector.....all those popular companies are dead....Ajaokuta, Nitel, Nasco UTC.

Acekidc4:


Good, That's the Keyword, INFLATION...............That will be the main problem. Isn't there a way around it??

Interesting!

How do we decrease maximum wage and how realistic is this from an economic standpoint?

Are there any precedence?

Thanks

Yankiss:
That is the point. I have raised numerous concerns in national daily articles about this issue. The solution is not increase in minimum wage but Decrease in Maximum wage earnable. Lowering the maximum wage significantly will lead to Deflation. Therefore, the minimum wage would acquire significant purchasing power, even as it is today. Once you raise the minimum wage to say 70k or 100k, everything else rises - transportation, prices of goods. In some cases there is even a downward pull on the new wages following all round increment in services. You are in effect carrying more money which has not increased your purchasing power.

#####Fix our refineries ####$$$$


Or is that too much

a demand to made on a


responsible government?.

Fix our refineries


Or is that too much

a demand to made on a


responsible government?.

franugo:


To the best of my knowledge, no government has ever defaulted in nysc payment, I don't see how that is an achievement

You have no knowledge to boast of, talkless of 'best' of knowledge.

My colleagues were owed nysc allawee during Buhari era.

QuantAnalyst:
Interesting!

How do we decrease maximum wage and how realistic is this from an economic standpoint?

Are there any precedence?

Thanks

Maximum wage can be decreased by an act of the National Assembly. If there is an act to criminalize wages, say, more than ten times the minimum wage, no one will earn above 300k where 30k is minimum wage. Goods beyond the reach of a whole community cannot sell in that community and hence u either drive down the price or go elsewhere. Think of Nigeria as a macro community. The sum effect is prices coming down to meet buyers or goods go to waste. This combined with increased exportable products will strengthen the economy.

Aww

No mind them. That is where the corruption started.

sexyking1:
During PDP, #18,000 is equivalent to $90
APC #33,000 is equal to $44

Please did APC govt actually increased the minimum wages or decreased it?

[quote author=LordAdam16 post=123645283]

LordAdam16:


You should have done it for Buhari's admin without adding that epithet.

For consistency, do it at the parallel market rate.

Nigeria has fallen into a vicious cycle since the 2014 drop in oil price. The new minimum wage will not be much higher than the current min wage in $ terms because Tinubu will simply devalue the exchange rate to pay for the increase.

I'm of the opinion that is a secondary reason why he hasn't unified the rates just yet. In addition to the expected increase in gasoline prices.

If he devalues from N460 to N1000. He'd be able to pay 80K minimum wage. Rent of 200K would become 500K. Tuition fees in federal universities will cross 300K. Lagos to Abuja Economy flight ticket will be N120K one-way, 250K two-way; Premium will 300K one way, 600K two-way. iPhone of 850K will become 2m. Starting rates for beat-up, barely road-legal cars from 25 years ago will be 3m. National budget will be N50T.

But I guess everyone will have a win. Tinubu will claim he raised the wages. The union leaders will claim they got results. The average worker will see more digits in their bank account balance. But in real terms, nothing will have changed besides the inequality gap getting wider. And you know what, the populace deserves it.

If you are an adult and can be bamboozled by the categorically false socialist "higher minimum wage = higher standard of living" trope like an impressionable toddler who prefers more notes of lower denomination to few notes of higher denomination; then you surely deserve to live like a dreg.

We've been down this road too many times to mention. Every generation with more "education" becomes verifiably dumber. And political commentators like yourself rely on the hoi polloi's severe misunderstanding of economic principles to push your agendas.

-Lord

You should have done it for Buhari's admin without adding that epithet.

For consistency, do it at the parallel market rate.

Nigeria has fallen into a vicious cycle since the 2014 drop in oil price. The new minimum wage will not be much higher than the current min wage in $ terms because Tinubu will simply devalue the exchange rate to pay for the increase.

I'm of the opinion that is a secondary reason why he hasn't unified the rates just yet. In addition to the expected increase in gasoline prices.

If he devalues from N460 to N1000. He'd be able to pay 80K minimum wage. Rent of 200K would become 500K. Tuition fees in federal universities will cross 300K. Lagos to Abuja Economy flight ticket will be N120K one-way, 250K two-way; Premium will 300K one way, 600K two-way. iPhone of 850K will become 2m. Starting rates for beat-up, barely road-legal cars from 25 years ago will be 3m. National budget will be N50T.

But I guess everyone will have a win. Tinubu will claim he raised the wages. The union leaders will claim they got results. The average worker will see more digits in their bank account balance. But in real terms, nothing will have changed besides the inequality gap getting wider. And you know what, the populace deserves it.

If you are an adult and can be bamboozled by the categorically false socialist "higher minimum wage = higher standard of living" trope like an impressionable toddler who prefers more notes of lower denomination to few notes of higher denomination; then you surely deserve to live like a dreg.

We've been down this road too many times to mention. Every generation with more "education" becomes verifiably dumber. And political commentators like yourself rely on the hoi polloi's severe misunderstanding of economic principles to push your agendas.

-Lord[/quote]

Let's do Buhari's. Buhari' should have been straight forward but the for volatility the Naira went through during his disastrous time in office.

I'll however keep it as simple as possible. He met the minimum wage at 18,000 then worth $83.33.

However by January 2016, the Naira had depreciated to 310 at the parallel market bringing it down to approximately $58.

By early 2017, it had tumbled to around 550, ($32.7 in value)

However, the Naira enjoyed a rebound in 2017 with the introduction of a second forex market which priced the Naira at a more market reflective exchange rate which was around 365 to $1 making the minimum wage $49.3 in real terms.

In 2019, the minimum wage was increased to 30,000. Using a parallel market rate of 365, that was approximately $82. This was very close to the $83.33 that Buhari met it.

However, by mid 2020, the Naira's value had depreciated in the parallel market to 440 (approximately $68.2)

It was to depreciate further to around 485 till around late 2021, making it around $62.8.

In late 2021, the CBN ended the sale of weekly sale of forex to the Bureau de Change operators -who bought their weekly allocation at around 410 to a dollar and who promptly sold it at the juicy parallel market rate. What was needed them was simply to devalue the official exchange rate from 410 to 460 and both rates would have merged. Only God knows who stopped the devaluation- Emefiele or Buhari?

This action starved the parallel market of forex and led to its massive depreciating. To further add to its woes, the Naira redesign and swap policy brought the currency to its greatest woes, causing it to plummet to a rumoured 880 to $1 at a time-approximately $34

As at May 29,2023, handover date, the Naira was around 750, making it $40 in real terms.

To surmise, the Buhari led government met the exchange rate at $83.33 and left it at $40. That is a loss of more than half of its value. It's lowest value was $34 during the Naira swap and the highest $82 in 2019 when the 30,000 minimum wage was first introduced.

Concerning currency devaluation, I very much doubt Tinubu will take that route. He simply wants it to be market reflective and wants the official and second window rates to merge.

The elephant in the room today is the petrol price. A devaluation of the Naira would definitely cause gross dissatisfaction amongst the people as it would cause the price of petrol to shoot through the roof. The present grudging acceptance of the fuel subsidy removal by the populace is commendable

However, there's a limit to what they can take. I suspect that's why the official exchange rate of the Naira at 461 hasn't been discarded. Merging the 2 rates isn't rocket science. Merge them at 630 and start reselling dollars to the BDC 's who'll flood the black market. This will greatly strengthen the Naira there bringing it very close to 630. Any difference should simply be the common arbitrage profits that any typical seller expects.

However, as you noticed, the people can easily be fooled. I have always scoffed at palliatives government gives whenever the fuel subsidy is cut. It is basically a sup to please or deceive the people.

Tinubu met a fiscal mess if its true that the federal government spends 100% of budget revenue on debt servicing, Simply ending the fuel subsidy and unifying the exchange rates will only reduce the amount to service debt in my calculation to about 60%.

He can't sack the bloated civil service for now. That's usually done during a second term. Even a pruning would be quite expensive as the civil servants will be paid retrenchment benefits (this being Nigeria, it can be held off forever )

Increasing crude oil production to 1.8 or even 2mbpd would be prudent as that would increase revenue. Altogether, perhaps, only 50% of the budget will be used to service debt.

There's however, that troublesome 50% left. Tax revenues may need to rise by a further 3-5% of GDP within 2 years. This will be very hard to achieve. Some revenue can be raised by liberalising imports and replacing them with tariffs which would yield lots of cash and also boost the economy. Revenue earned however might be stingy considering the size of the problem.

A devaluation may be the only way out but must be done as you suggest in a way to fool the masses.

This will reduce the public debt (local debt) as a percentage of GDP and hence, make it more manageable.

That aside, I hope the government can reduce company tax rates to nothing more than 15%, with the education tax included. This should boost economic growth and probably achieve the 7% Tinubu seeks. A further cut to 12.5% will set the economy on fire.

Let's see who he appoints as the finance minister. Will it be the erudite Pat Utomi? Or should the nation expect its own "Chicago Boys"?

Time will tell.

zedegit:



You have no knowledge to boast of, talkless of 'best' of knowledge.

My colleagues were owed nysc allawee during Buhari era.

I served during Buhari's tenure too and only corpers not paid were those with one issue or the other, not because monies were not released as you insinuated.

grandstar:


A devaluation may be the only way out but must be done as you suggest in a way to fool the masses.

This will reduce the public debt (local debt) as a percentage of GDP and hence, make it more manageable.

That aside, I hope the government can reduce company tax rates to nothing more than 15%, with the education tax included. This should boost economic growth and probably achieve the 7% Tinubu seeks. A further cut to 12.5% will set the economy on fire.

Let's see who he appoints as the finance minister. Will it be the erudite Pat Utomi? Or should the nation expect its own "Chicago Boys"?

Time will tell.

Props to you for the detailed breakdown.

As your calcs showed, your initial attempt to paint the PDP administrations as a net negative for labor compensation was tongue-in-cheek. PDP did its best for labor at a time when our economy was showing incredible signs of growth. But if you ask the average APC minion including Tinubu, he'd say it was all paper statistics.

Unfortunately, it was predicated on high oil prices, and we did not have enough time to diversify before the crash.

Perhaps if we had removed the subsidy in 2012, we'd be singing a different tune now. Our non-oil exports, while catastrophically low, has been experiencing double digit growth. We need to get that to at least $50B (it's just shy of $5B now), so we can pay our welfare recipients masquerading as civil servants.

The Dangote + BUA refineries might actually double the current tally. But Tinubu and his team have to identify at least five products. Five that we can invest a couple billions in, offer introductory tax relief, and become the global source for high-quality items in that product category. They don't have to be fanciful. Bangladesh makes $7B on just Knit T-Shirts. That's more than our entire non-oil export haul.

Not stupid economic policies like closing borders and creating an enabling environment for smugglers to thrive.

With respect to tax, I'm not a big fan of increasing the tax burden. It is necessary, but for every N1 in new obligation only about 30 or so kobo will be deployed after the public and private partners in collection and disbursement are done playing hanky-panky. It is better for the economy if that tax naira stays within the economy than pilfered before returning.

Also, reducing the corporate tax rate will have to be matched by commensurate increase in the personal tax rate. The corporates and their white collar workers pay most of the taxes in Nigeria. I'm sure the banks alone pay more taxes than the bottom 30% of Nigerians. But guess who complains more?!

Make no mistake, I actually will love a tax rate of 12.5%, but there's no where else to make the shortfall in the interceding decade or so before higher tax receipts cancel out the rate reduction. And as you are aware, the current tax inflow can barely cover our debt payments.

Our current tax regime is sort of similar to China's. The government knows everyone but does not press for personal income tax. Instead, it piles on companies and enterprises. And I'll say as someone who balked at 40% for €40K+ in Ireland and top rate of 55% in Austria; there is such a thing as too much tax.

With Tinubu, however, the tax burden WILL definitely inch higher. So this is more of a moot point.

On Pat Utomi and co; I actually do not want a by-the-book Western-inspired economist. I hope he appoints a thoroughbred intellectual/thought leader for the three Big Three (Min of Finance, CBN Governor, and Min of Trade & Investment). I've followed Pat Utomi enough to know he will come with an IMF checklist. I'm not enamored by profiles either. Wale Edun has the credentials but I have no clue what School of Thought he ascribes to. Complete blackhole and that makes me uneasy.

-Lord