Godwin Emefiele

The Central Bank of Nigeria has said the proposed increase in the national minimum wage will stimulate output growth.

This was contained in the CBN communique issued after the Monetary Policy Committee (MPC) meeting in Abuja held between November 21 and 22, 2018.

On the effects of the proposed minimum wage, the communique read: "The MPC welcomed the moderation in inflation in October, reflecting declining food prices. The Committee believes that given the negative output gap, the proposed increase in the national minimum wage would stimulate output growth due to prolonged weak aggregate demand arising from salary arrears and contractor debt.

"Consequently, its impact on the aggregate price level would be largely muted, given that the monetary aggregates have largely underperformed in fiscal 2018. In addition, the prevailing stability in the foreign exchange market would continue to moderate pressures on the domestic price level."

The MPC appraised recent developments in the global and domestic macroeconomic and financial environments, as well as the economic outlook in the first half of 2019.

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