To address inflation in the country, many companies increased their employees' salaries by 18.35% to N29.45 trillion in Q2 2023.
This was derived from the National Bureau of Statistics ‘Nigerian Gross Domestic Product Report (Expenditure and Income Approach): Q1, Q2,’ report.
The PUNCH said that the compensation of employees, which is the total remuneration in cash or in kind payable by employers to employees for the work done, rose from N24.88tn as of the first half of 2022 to N29.45tn as of the first half of 2023 which shows that N4 trillion was added.
The increase in some workers' salaries was due to the hardships faced in the country due to the economic conditions.
Speaking on this issue, the NBS has this to say,
In Q1 and Q2 of 2023, the Compensation of Employees grew by 15.08 per cent and 19.41 per cent respectively in real terms year-on-year.
These growth rates were higher than the Q1 of 2022 and Q2 of 2022 rates recorded at 6.48 per cent and 3.93 per cent respectively. On a quarter-on-quarter basis, the CoE in real terms fell by 3.33 per cent in Q1 and grew by 11.25 per cent in Q2 of 2023. In nominal terms, the compensation of employees grew by 16.03 per cent and 20.50 per cent in Q1 and Q2 of 2023 respectively.
The total remuneration in cash or in kind payable by employers to employees for the work done.
Direct social transfers from employers to their employees or retired employees and their family, such as payments for sickness, educational grants and pensions that do not set up an independent fund, are also imputed to compensation of employees.
In the period under review, firms, including SMEs, grew their operating surplus to N67.56tn, an 11.93 per cent increase from the N60.36tn recorded in the first of 2022.
Defining operating surplus, the NBS said,
This is equal to the profit that remains for firms after costs have been covered. It includes the profit of those who are self-employed, which is often included in the national accounts under the entry “Mixed Income”. It is calculated as a residual.
World Bank Warning
The World Bank warned in 2022 that Nigerian inflation has grown past the country's minimum wage of N30,000 by 55% and increased the poverty net by an estimated five million people in 2022.
Alex Sienaert, Chief Economist at World Bank Nigeria, said, “The cumulative inflation between 2019 and 2022 was 55 per cent, households’ purchasing power has slumped, and the real minimum wage in 2022 after discounting for inflation is N19,355 while in dollar value is $26 after discounting for both inflation and exchange rate depreciation.”
He said the minimum wage, $82 in 2019, had dropped to $26. In 2023, the lending institution recently disclosed that four million Nigerians were pushed into poverty between January and May 2023.
It reads, “The loss of purchasing power from high inflation has increased poverty in the short-term, pushing an estimated 4 million Nigerians into poverty between January and May 2023.”
Bretton Woods Institution also predicted that more than 2.8 million Nigerians are expected to fall into poverty by the end of 2023.