Economists: Nigeria's Worker Pay Hike Won't Cause Inflation

Economists, including Dr. Muda Yusuf and Dr. Ayo Teriba, have stated that the recent decision by the Nigerian government to increase the pay of federal workers will not trigger inflation. They argue that the current wage levels in the public sector are relatively low, and the increase will not exert significant inflationary pressure.

Yusuf noted that the scale of the pay rise is small and does not represent a substantial amount of money that could influence overall price levels. He emphasized that inflation is typically driven by substantial increases in money supply, which this pay rise does not represent.

Teriba added that while the wage increase may help alleviate poverty among public workers, it should not be made permanent without clear justification. He urged the government to communicate the rationale behind such decisions clearly and to consider the temporary nature of wage adjustments in response to external shocks.