• Thursday, February 29, 2024
businessday logo

BusinessDay

Nigeria among top 5 countries with highest wage growth – Report

Nigeria among top 5 countries with highest wage growth – Report

Nigeria is among the top five countries with the highest growth in minimum net monthly wage within a year, the latest 2024 Minimum Wages report has shown.

The report by Picodi, an international e-commerce platform, which analysed how minimum wage changed in 67 countries, compared the monthly minimum wages for full-time work from the beginning of the last year to January 8, 2024.

“Nigeria ranked third in the ranking: the minimum net wage is N55,000, which is 83.3 percent more than last year (N30,000 net),” the report said.

Read also: Here are African countries with the lowest cost of living in 2024

It said the lowest rises were given to workers in France (3.4 percent), Germany (2.8 percent) and Thailand (2.5 percent), while in countries such as Spain, Malaysia, or Vietnam, governments have frozen the minimum wage or have not yet decided on the increase.

“The highest increase in the minimum wage can be found in Argentina (138 percent) and Türkiye (100 percent), although this is caused by the huge inflation in those countries.”

The report also revealed that Nigeria’s 83.3 percent increase is the highest in at least five years.

BusinessDay reported in November that compensation of employees (wages and salaries) grew the most in two years. According to the National Bureau of Statistics (NBS), it rose by 19.41 percent in the second quarter of 2023 from 15.08 percent in the previous quarter.

“Some companies especially in the private sector have reviewed their compensation remuneration packages to reflect the inflationary trends,” Muda Yusuf, chief executive officer of the Centre for Promotion of Private Enterprises, said.

He said most companies that can’t increase salaries are usually the Micro, Small and Medium Enterprises and that those that can adjust their own are the medium and large ones.

A recent report by SBM Intelligence, an Africa-focused geopolitical research and strategic communications consulting firm also showed that five in 10 Nigerians experienced an increase in their income in the last four years.

It said 50 percent of Nigerians who had an increased income is more than double the 18.6 percent who reported an income decline.

“Respondents who reported increased income attributed it to promotions, changing jobs and increased demand for their goods. In contrast, job losses, salary cuts and reduced sales were cited as reasons for experiencing a reduced income,” it said.

Read also: 10 African countries with highest inflation rate

The increase in salaries and wages expanded household consumption in Africa’s biggest economy in Q2. Data from NBS shows that it recorded a positive real growth rate of 3.30 percent from a negative growth of 24.95 percent in the previous quarter.

“Positive growth rates were recorded since Q3 of 2020 as recovery from the pandemic was witnessed, while growth became negative from Q2 of 2022 to Q1 of 2023 occasioned by rising prices, the cash crunch witnessed earlier this year as well as the current challenging economic conditions,” the NBS said.

Over the past seven months, the country’s inflation rate has accelerated to the highest in at least 20 years largely on the back of Federal Government reforms including the removal of petrol subsidy and naira devaluation

According to the NBS, inflation to 28.92 percent in December from 28.20 percent in November. Food inflation, which constitutes 50 percent of the inflation rate, rose to 33.93 percent from 32.84 percent in the previous month.

Analysts at Picodi Nigeria highlighted that the total cost of the “survival basket” at the beginning of 2024 is N64,060 which is 33.1 percent more than last year.

The basket consists of basic food items such as bread, milk, eggs, rice, cheese, meat, fruits and vegetables.

“This amount represents 116.5 percent of the net minimum wage, while at the beginning of last year, it was 160.4 percent of the minimum wage. This means that the increase in Nigerian minimum wage kept up with the rise of food prices,” the analysts said in the report.

They noted that the most comfortable ratio of the grocery basket to the minimum wage can be found in the United Kingdom, Ireland, the Netherlands, Luxembourg and New Zealand.

Read also: Top 10 countries with strongest military strength in 2024

“Nigeria is far behind those countries – in our country, the survival basket accounts for 116.5 percent of the minimum wage (67th place out of possible 67). The minimum wage is not enough to cover even such a basic set of groceries.”

Africa’s most populous nation ranked lower than countries such as Uzbekistan (96.1 percent), the Philippines (66.2 percent), India (58.5 percent) and Pakistan (42.4 percent).