Renowned political economist Pat Utomi says President Bola Tinubu’s government and labour unions should use the new minimum wage negotiation window to move Nigeria down the path of thrift and production.

Mr Utomi gave the advice in an interview on Friday in Lagos.

He was reacting to the impasse between organised labour and the federal government on the new minimum wage for workers, which led to the strike by labour unions on Monday.

Mr Utomi said, “Labour must insist on a dramatic slash in the cost of government and investment of the savings made in production programmes and infrastructure. This to facilitate and sustain the value chain of the output based on our latent comparative advantage from strong factor endowments.

“On its part, government should establish what it is paying for. Is it paying as welfare for people who just show up? Output targets need to be established, and hard consequences for abuse of positions like corruption and begging on the job from customers.”

He said a benchmark for civil society monitoring of both parties also needed to be established with clearly outlined consequences.

According to Mr Utomi, the government must also devise bold initiatives to drive the transition to production, as Operation Feed the Nation attempted in the mid-1970s.

The economist also mentioned that future adjustments to minimum wage weighed heavily on productivity improvements.

“Once a proper framework is established now the template to plug in productivity gains should be activated. It should not be a matter of sentiment or mood of the leaders on both sides,” he added.

Labour unions’ declaration of a nationwide indefinite strike on Monday over the new minimum wage affected all sectors of the economy.

However, after the federal government committed to raising its proposed minimum wage of N60,000 at a meeting with labour leaders, the unionists on Tuesday announced the suspension of industrial action for a week for further negotiation.

The government and the organised private sector had initially proposed N48,000, then N54,000 and N57,000, all of which were rejected by labour unions.

The unions had also proposed N615,000 as a new minimum wage but later reduced it to N497,000 and N494,000 to reflect the prevailing economic realities.

(NAN)