In a bid to address the impact of surging inflation, companies in Nigeria raised their employees’ salaries by 18.35%, totaling N29.45 trillion in the first half of 2023. Data from the National Bureau of Statistics (NBS) revealed that compensation of employees, encompassing remuneration in cash or kind, increased from N24.88 trillion in the first half of 2022 to N29.45 trillion in the corresponding period of 2023.
Despite the challenging economic conditions, with heightened prices and increased living costs, businesses took measures to mitigate the effects on their workforce. The NBS reported a year-on-year growth in Compensation of Employees by 15.08% in Q1 and 19.41% in Q2 of 2023 in real terms. These figures surpassed the rates recorded in the same periods of 2022. On a quarter-on-quarter basis, there was a 3.33% decrease in Q1 but an 11.25% growth in Q2 of 2023.
The NBS further explained that the Compensation of Employees refers to the total remuneration payable by employers to employees for their work, encompassing both cash and non-cash benefits.
During the reviewed period, companies, including small and medium-sized enterprises (SMEs), witnessed an 11.93% increase in operating surplus, amounting to N67.56 trillion, compared to N60.36 trillion recorded in the first half of 2022. Operating surplus, defined as the profit that remains for firms after covering costs, saw growth amid economic challenges.
The report comes amid concerns about the erosion of purchasing power and increased poverty in Nigeria due to record-high inflation. The World Bank had previously warned that inflation had significantly reduced the real value of the minimum wage and contributed to a rise in poverty levels.
As inflation continues to impact Nigerians, the report highlights the efforts made by companies to address the economic challenges faced by their employees through increased compensation.
