Organised labour has warned the Federal Government that any attempt to devalue the naira again will result to mass protest that will shut down the country’s economy.
This is even as the Edo State Governor, Adams Oshiomhole, said that devaluing the naira was not the solution to the country’s current economic woes, attributing the agitation for the local currency’s devaluation to speculators in the system anxiously waiting to take advantage of an official depreciation of the naira.
Oshiomhole, who was the guest speaker at The- Cable Colloquium on, “The Naira on Trial: To Devalue or Not?” yesterday, in Lagos, said that drop in crude oil prices, which resulted to fall in the country’s reserve earnings, should not be a yardstick for naira devaluation.
The Vice President, Nigeria Labour Congress (NLC), Issa Aremu, who also spoke at the event, said that labour unions in the country would resist any attempt by the Federal Government to devalue the naira, saying that with the current exchange rate of N318 to the dollar, workers’ minimum wage should be increased from N18,000 to N48,000 monthly. According to Aremu, the current minimum wage of N18,000 is due for review and government is already aware of this.
He said looking at the present economic situation in the country, it would be unrealistic for Nigerian workers to collect N18,000 as monthly salary after working for one month.
He added that the law provided that every five years, the minimum wage should be increased, noting that with the current economic challenges and the falling value of, “our currency, the purchasing power of our workers, I think we have every reason to try to advance for a new minimum wage because at this time, the N18,000 is not acceptable.”
“The last time we signed this current minimum wage of N18,000 around 2009/2010, naira was exchanged for $105. We arrived at $150 for minimum wage.
This involved organised labour, NECA, manufacturers and even the CBN. But now, with this depreciation of naira, this N18,000 minimum wage is less than $60.
What I am saying here is that if you look at the current interest rate, minimum wage is supposed to be N48,000. So, if government dares devalue naira again, labour will resist and cause instability in the economy,” Aremu said.
Oshiomole, on his part, said it was time the country looked inward on ways to increase local production of items that will attract foreign exchange earnings into the country. The Edo State Governor said that current realities had shown that in the past years when the Federal Government devalued the naira, it had not really strengthened it.
He pointed out that the pressure on the naira would not have occurred if the crude oil prices at the international market remained at $140 per barrel, adding that the speculators were responsible for the current pressure on naira devaluation. “Everything was perfect when oil price was $140 a barrel.
There was no conversation whether naira should be devalued upward. So, if it had gone to $200 a barrel now, I suspect nobody will invite us to this gathering to talk about whether naira should be valued upward? Only yesterday (Wednesday), the naira eased to 318 to the dollar on the parallel market.
I think what has triggered this conversation is the fact that a couple of things are happening in this environment arising from decisions by politicians and their collaborators in the private sector within the comity of the elites. And so, oil at $140 was good,” Oshiomole said.
On Nigeria’s crude oil earnings, the governor said: “From the figures I received from CBN, whether true or not, but I will hold the CBN responsible for publishing false document if anything is wrong.
The CBN document revealed that our crude oil earnings, with oil selling for $120/$140 per barrel, we had a foreign reserve of $42.8 billion at about 2014 and suddenly dropped around 2016 to about $27.3 billion. And of course, as we speak, I understand the figure is around $28 billion.
“Now why is it coming down? It is coming down because our earnings have dropped as a result of the sharp drop in oil prices. Our appetite for imports and foreign goods has not been cut.
And so, faced with rising demand for forex and declining receipt of forex, of course, something has to be done; you have to fall back on your reserves. The result is that under two years, the reserve has dropped from $42.8 billion to the current level of $27.3 billion.”