Inflation wipes out gains in workers’ pay despite wage increases
The real value of Nigerian workers' earnings has dropped sharply, with inflation erasing much of the benefit from higher nominal wages. Data from the Central Bank of Nigeria shows that although salaries have increased on paper, their purchasing power has significantly declined. Experts like Segun Ajibola and Yinka Ogunnubi highlight that rising costs and currency depreciation have left many workers struggling. The gap between real and nominal income is widening, impacting both formal and informal sector employees.
TLDR
- The real value of employees’ earnings fell by about N2.79tn in 2024 to N25.48tn, despite higher nominal pay.
- Compensation of employees declined by 9.85 per cent to N25.48tn in 2024, from N28.27tn in 2023.
- Nominally, compensation rose by 18.43 per cent to N75.59tn in 2024, from N63.83tn in 2023, but inflation wiped out these gains.
- Segun Ajibola explained that inflation, naira depreciation, and rising living costs have eroded workers’ purchasing power.
- Yinka Ogunnubi noted that wage increases often lag behind inflation, and faster adjustments are needed to protect living standards.
