The government might need to raise domestic and external borrowing ceilings to avoid fresh borrowings from the apex bank’s Ways and Means, as highlighted by recent Nigeria’s economic reforms. The ongoing issue of the new minimum wage between Organized Labour and the government has persisted since the start of the year to mitigate the harsh economic conditions. Nigeria has experienced recent reforms such as the removal of fuel subsidy and the unification of the foreign exchange market, which have elevated the cost of living.
Labour leaders are advocating for a significant increase in minimum wages, proposing N615,000 compared to the current N30,000, with indications that the tripartite committee may recommend N70,000. However, despite the allocation of N6.48tn for personnel costs in the 2024 budget, the International Monetary Fund (IMF) suggests it may be insufficient, anticipating a budget deficit surpassing projections due to various factors.
Finance Minister Wale Edun revealed the government’s plan to reduce the budget deficit from 6.1% to 3.8% in the current appropriation. However, the IMF projects a higher fiscal deficit than anticipated, attributed to lower oil/gas revenue projections and rising interest costs. The IMF recommends that the government consider meeting its financing needs from the market and external borrowing to prevent recourse to CBN financing.
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