The recent announcement by the Federal government to increase the salaries of federal workers by 40 percent may seem like a good idea on the surface, but a closer examination reveals otherwise. The move could have severe implications for the country’s economy and the workforce.
At the risk of sounding extremely critical of this administration, I have opted to share the following thoughts quickly.
One major issue is the inflationary effect of such an increase, given that Nigeria already has a high inflation rate which according to the National Bureau of Statistics stands at over 21 percent. This increase in salaries could exacerbate the current situation, leading to a further rise in the cost of living for the average Nigerian.
Another potential problem is the ripple effect of this salary increase on state workers. State workers, having to transact in the same market as their Federal counterparts would demand similar salary increases from their governors, who may not have the financial resources to meet these demands, leading to labour crises and strikes. This would be a hard hitting headache especially for states with completely new figures at the helms of affairs.
Furthermore, market inflation would mean increased operating costs for institutions especially for private establishments. The consequences on private sectors, especially medium and small scale entities would automatically mean a cash crunch.
It would lead to increase in unemployment rates, which is already at a staggering 33 percent.
It is puzzling why the Muhammadu Buhari Administration has opted to implement this salary increase at this time. It appears to be a Greek gift, one that initially seems attractive, but is ultimately harmful.
It is perhaps just as former lawmaker and activist, Shehu Sani put it, “the Government that has few weeks to go is borrowing more money, increasing salaries, employing more people into the Federal Government Bureaucracy and awarding contracts in billions while contractors are owed; traps in the guise of niceties.”
Moreso, maintaining the payment of these funds without borrowing much will constitute a headache for the next Administration. Or is this a distractive ploy? Only the Muhammadu Buhari Administration would be able to tell?
While an increase in salaries for workers is desirable, the proposed 40 percent increase for federal workers in Nigeria is a bad idea that could have negative impacts on the economy, the workforce, and the country’s future. The government should reconsider this move and focus on implementing sustainable solutions that will benefit all Nigerians in the long term.
