According to the latest Minimum Wages report of 2024 by Picodi, an international e-commerce platform, Nigeria has emerged as one of the top five nations experiencing a significant surge in their minimum net monthly wage. The report meticulously analysed the changes in minimum wage across 67 countries. The report compared monthly minimum wages for full-time employment from the previous year till January 8, 2024. According to the report, Nigeria secured the third position in the ranking of minimum net wage, with a noteworthy figure of ₦55,000. This pay is an impressive 83.3 percent higher than last year’s ₦30,000 net income.
Workers in France, Germany, and Thailand received the smallest pay increases at 3.4 percent, 2.8 percent, and 2.5 percent respectively. In Spain, Malaysia, and Vietnam, the minimum wage remains frozen or pending an increase. However, Argentina witnessed a notable rise of 138 percent in its minimum wage, closely followed by Türkiye with a 100 percent increase. It is important to note that these significant increases are primarily due to the rampant inflation prevailing in these countries. Nigeria’s 83.3 percent escalation, as disclosed in the report, stands out as the most substantial surge witnessed in the past five years.
NBS reported an increase in employee compensation by 19.41% in Q2 of 2023
Also, in November, employee compensation, including wages and salaries, surged remarkably, marking the highest growth rate in two years. The National Bureau of Statistics (NBS) reported an increase of 19.41 percent in the second quarter of 2023, compared to the previous quarter’s 15.08 percent. According to Muda Yusuf, the CEO of the Centre for Promotion of Private Enterprises, several companies in the private sector have re-evaluated their compensation packages to align with the increasing inflationary patterns. He noted that typically, it is the Micro, Small, and Medium Enterprises that cannot enhance salaries, while medium and large enterprises possess the flexibility to make adjustments.
According to a recent study conducted by SBM Intelligence, a consulting firm specialising in geopolitical research and strategic communications with a focus on Africa, 50 percent of the Nigerian population observed a boost in their earnings over the past four years. This figure is significantly higher than the 18.6 percent of individuals who reported a decrease in their income, as stated in the same report. Respondents highlighted various factors leading to enhanced income, including advancements in their careers, transitions to new positions, and an upsurge in demand for their products. Conversely, a decline in income was linked to job terminations, reduced salaries, and a slump in sales, as cited by individuals facing such circumstances.
Inflation rate has surged to its highest point in two decades.
In the second quarter, household consumption in Africa’s largest economy experienced a surge due to the rise in salaries and wages. According to data from the NBS, there was a significant improvement in the actual growth rate at 3.30 percent, which marks a considerable turnaround from the previous quarter’s negative growth rate of 24.95 percent. The NBS reports highlight a fluctuating trend in growth rates since Q3 of 2020, showcasing a positive recovery from the pandemic. However, a downturn in growth occurred from Q2 of 2022 to Q1 of 2023 due to the emergence of rising prices, a cash shortage experienced earlier in the year, and persistently challenging economic conditions.
More so, in seven months, the inflation rate in the nation has surged to its highest point in two decades. This significant rise can be primarily attributed to the Federal Government’s series of reforms, such as abolishing petrol subsidies and devaluing the national currency. Also, inflation increased from 28.20 percent in November to 28.92 percent in December. Notably, food inflation, accounting for 50 percent of the overall inflation rate, escalated from 32 to 33.93 percent. Last month, a noticeable 84 percent increase was recorded. Picodi Nigeria analysts noted the cost of the essential survival basket at the beginning of 2024. This basket, containing staple food items like bread, milk, eggs, rice, cheese, meat, fruits, and vegetables, now amounts to ₦64,060, signifying a steep rise of 33.1 percent from the previous year.
Related link: Minimum wages may increase to N200,000
Lastly, the analysts noted that the current figure corresponds to 116.5 percent of the net minimum wage, whereas it was equivalent to 160.4 percent in the previous year. This implies that the Nigerian minimum wage has aligned with the food price surge. The United Kingdom, Ireland, Netherlands, Luxembourg, and New Zealand have been identified as nations where the grocery basket-to-minimum wage ratio offers optimum comfort. However, Nigeria lags far behind these countries, occupying the 67th position out of a possible 67. Also, the minimum wage falls significantly short of covering the essential grocery items needed for survival, with the survival basket accounting for a staggering 116.5 percent of the minimum wage. In comparison to countries like Uzbekistan (96.1 percent), the Philippines (66.2 percent), India (58.5 percent), and Pakistan (42.4 percent), Africa’s nation with the highest population has a lower ranking.
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