Is GOD & POLITICS delaying the minimum wage hike ?   

March 13 (Lagos) - The downward economic conundrum that our economy has been facing since 2014 has now brought us to a situation where the minimum wage in the Country of N 30,000 per month is not adequate to buy one full tank of petrol for a mid-size car. The reason is devaluation of the Naira. When that minimum wage was set, the Naira was in the region of 200-220 to 1 US Dollar. Today the Naira is around 1500-1600 to 1 US Dollar after its recent rally. 

Food inflation is at 35% officially but in the real world, it is way much higher, and prices of everyday food stuffs have gone out of hands of many people. For example Nigerian Breweries ( NB ) raised prices of their products for the 2nd time in under a month and their CEO even came out and said that people could not afford a beer after a hard days work. Other consumer good companies like FLOURMILL , NESTLE , PZ and UNILEVER have also had to increase prices of their products. These increases mean that most people cannot afford them or as much of them as they used to when the minimum wage had some purchasing power. 

It is obvious that the minimum wage in the Country has to be increased as soon as possible to enable workers afford the products they need. While this will cause more inflation it is necessary to support demand for products. 

While this needs to be done immediately, GOD and POLITICS are standing in the way. Nigeria a deeply religious society mixed with high level of illiteracy especially in the northern parts. The politicians ask people to pray for things to get better and the people respond with serious praying. 

Now that the Ramadan-Kareem season is upon us, and Easter will be here soon, the people (especially in the North) need to feel like their prayers have been answered and for that reason the politicians will wait to increase the minimum wage until the end of the festive period. At the end of this festive period, we will get the news of the increase in the minimum wage and people will get the feeling that their god has heard their prayers and delivered them. 

That is how politics, religion and economics mix up.  

Should the politicians wait for that date or make the announcement as soon as possible is a different question. Should we move away from theocratic based inducements and do what is practical and do it at the right time. The way it is looking now the consumer good companies will have to wait for GOD to stimulate the economy. 

While the politicians wait, smart investors in the stock market can position themselves knowing that the minimum wage will most likely be increased at the end of this festive period. Once people get paid more, they will be able to purchase products of FMCG companies like they used to do earlier and economy will be stimulated. So do your research well and pick the Companies you think will benefit from that demand when it comes. 



reporting for on Wednesday, March 13 2024 from Lagos, Nigeria
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