Minimum wage may not be less than N100,000 – Economist

Chief economist at SPM Professionals, Paul Alaje, shares his thoughts with AYOOLA OLASUPO on some of the recent economic policies made by the Federal Government among others

Recently, the Central Bank of Nigeria increased Nigeria’s Monetary Policy Rate known as interest rate from 22.75% to 24.75%. What implications will this have on the private sector?

What do you think of the Central Bank of Nigeria stimulating this programme at this point? I mean, initially at 15.75%, then to 22.75%, and then to 24.75%. This has tremendous implications for the private sector, individuals, the government, and most importantly the people of Nigeria. Well, it will be relatively difficult for the private sector to borrow money or to borrow new money and some banks will write the existing customer rates review because the baseline for lending has changed. So, when it changes and it goes up, it means that the cost of borrowing would also increase.

Again, this would mean a discouragement for investment, and in Economics, it is general for us to say that raising interest rates perpetually will cloud out investments and if it is, and by extension, it means it will cloud out employment. Unemployment is expected to increase, and the National Bureau of Statistics has reported that the Nigerian unemployment rate has increased from where it was to where it is now. The straight answer to that is that it will have adverse effects on the private sector.