Monthly Archives: May 2015

Minimum wage law hurts the poorest workers

By Tunde Obadina

Nigeria’s newly elected government will probably come under pressure from trade unions to hike the national minimum wage. Labour leaders have of late complained that the current wage floor of N18,000 (US$92) per month is not enough to support a decent standard of living. This rate, equivalent of US$3 a day, is certainly poverty pay for workers in both single and two working parent families. Nonetheless, the government should resist any demand to raise the minimum wage.

This advice will appear callous to those who believe that minimum wage protects low-paid workers and boost their purchasing power. It is a morally appealing contention while the case against it is counterintuitive. Pay regulation seems moral only when viewed from the perspective of the workers who benefit from it. Continue reading

The roots of anti-immigrant violence

By Tunde Obadina

The recent outbreak of mob violence against foreigners in South Africa illustrates the point that racism is not peculiar to any one race or historical period.  Xenophobic attacks that claimed lives in Durban and Johannesburg targeted black people from other African countries as well as other non-white immigrants.

Anti-immigrant sentiment is not limited to treatment of foreign nationals by local people. It also relates to the uneasy relationship between host communities and migrants from other parts of the same country. In recent decades thousands of people have been killed in different parts of Nigeria in bloody clashes between so-called indigenes and settlers, often stemming from xenophobia similar to what occurred in South Africa.The display of xenophobia has been especially disturbing because it made victims of citizens of African countries that actively supported the struggle to end apartheid and white minority rule in South Africa. The violence was seen by many on the continent as a stab in the back perpetrated by black South Africans who having gained power behaved with the same bigotry as did their former oppressors. But there is more to it than ingratitude. Anti-foreigner sentiments and violence has been present in virtually every country in the world. It was not that long ago when Nigerian leaders expelled Ghanaians after blaming them for their country’s economic woes. Continue reading

The poverty of anti-capitalism

By Tunde Obadina

It is an irony that progressives who claim to advocate for poor people in developing economies often prescribe an ideology that is detrimental to the interests of those they supposedly support. They rant about the evils of capitalism and urge poor-nation governments to restrict foreign capital and curb the activities of multinationals. They contend that the pursuit of profit, especially by foreigners, invariably results in cruel exploitation of the weak, as happened during the eras of slave trade and colonial rule that preceded modern-day globalisation.

This view of capitalism as a cause of poverty is nonsense. The reality is that over the past 250 years, trade and the pursuit of profit have lifted billions of people out of extreme poverty.  Continue reading

The missing oil money saga

I doubt that Sanusi Lamido Sanusi, the former governor of the Central Bank of Nigeria (CBN), will apologise to Nigerians for apparently mistakenly alleging that the Nigerian National Petroleum Corporation (NNPC) failed to remit colossal amounts of oil revenue to the treasury between January 2012 and July 2013. But it is the case that a forensic audit of the NNPC conducted by the global accountancy company PriceWaterhouseCoopers released in April found that the corporation did not withhold money but actually overpaid the state. Continue reading