Economic Experts Forecast Federal Wage Increase Will Not Ignite Inflationary Pressure in Nigeria

Experts Dr. Muda Yusuf and Dr. Ayo Teriba explain why the latest federal wage increase is too small to drive inflation and may actually help reduce poverty.

By: AXL Media

Published: Apr 28, 2026, 11:11 AM EDT

Source: Information for this report was sourced from The Punch

Public Sector Wage Adjustments Deemed Non-Inflationary

Prominent economists have weighed in on the Federal Government’s recent decision to increase compensation for select federal workers, asserting that the move will not trigger a spike in inflation. The pay rise specifically targets employees under the Consolidated Research and Allied Institutions Salary Structure and the Consolidated Public Service Salary Structure. According to experts, the current wage levels in the public sector are relatively low, meaning these adjustments are unlikely to disturb the broader economic equilibrium of the country.

Scale of Increase Insufficient to Move Market Needle

Dr. Muda Yusuf, Director of the Centre for Promotion of Private Enterprise, stated that the quantum of the salary increase is insufficient to generate significant inflationary pressure. He explained that inflation is typically the result of a substantial rise in the money supply that builds a critical mass. Yusuf noted that because the current pay rise is limited to specific segments of the civil service rather than the entire national workforce, it lacks the financial weight required to influence overall price levels across the economy.

Relief for Public Workers Facing Severe Poverty Levels

The Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, suggested that the salary adjustment functions more as a "poverty pill" than an economic disruptor. He observed that public sector wages in Nigeria have remained at poor levels for a prolonged period, and the increase is more likely to provide essential relief to struggling households. Teriba argued that instead of causing inflation, the additional funds will help ensure that workers' take-home pay can cover basic necessities in a challenging economic climate.