Amidst a challenging economic landscape and soaring inflation, companies in Nigeria exhibited resilience by increasing salaries for their employees by 18.35% to N29.45 trillion in the first half of 2023.
This notable rise, as reported by the National Bureau of Statistics (NBS), contrasts with the worsening economic conditions faced by workers grappling with higher prices and an elevated cost of living.
The NBS’s ‘Nigerian Gross Domestic Product Report (Expenditure and Income Approach): Q1, Q2′ reveals that compensation of employees, encompassing total remuneration in cash or kind payable by employers, escalated from N24.88 trillion in H1 2022 to N29.45 trillion in H1 2023.
Despite the economic challenges, companies, including SMEs, bolstered their operating surplus to N67.56 trillion, reflecting an 11.93% increase from the N60.36 trillion recorded in the first half of 2022.
The operating surplus, defined by the NBS as the profit remaining for firms after covering costs, serves as a critical metric for gauging economic performance.
The surge in salaries, outpacing inflation, underscores the commitment of businesses to sustaining employee well-being amidst the economic headwinds.
As inflation rates soared to 22.79% by the end of the reviewed period, companies navigated financial complexities to prioritize employee compensation, acting as a counterforce to the adverse effects of inflation on workers’ purchasing power.
The World Bank’s prior warnings about inflation eroding the minimum wage and increasing poverty underscore the significance of businesses’ efforts to shield their workforce from the economic downturn.