Data from the National Bureau of Statistics indicate Compensation of Employees in Nigeria stood at N16.03 trillion growing by 11.14% in real terms, the first positive year on year annual growth rate recorded since 2015.
This was contained in the recently released Gross Domestic Product (GDP) by Income and Expenditure Approach for 2017. The report combines the data for all the four quarters in 2017 and shows that workers remuneration increased by 11.14% in 2017.
Compensation of Employees (Wages and Salaries)
This consists of the total remuneration of employees in the formal sector, including both wages and salaries, and benefits in kind (such as pensions). In 2017, Employee Compensation rose nominally to N29.9 trillion from N25.8 trillion in 2016. Employee compensation was N24.7 trillion in 2015 on nominal terms.
[wpdatachart id=256]
In real terms (after adjusting for inflation), this represents a growth rate of about 11.14% between 2017 and 2016, the first positive year on year annual growth rate recorded since 2015. In 2016, compensation of employees in real terms declined by 9.68% year on year. It expanded steadily throughout 2017 with year on year growth rates reaching double digits from the second through fourth quarters of the year.
The data reflects a much better economy witnessed in 2017 when compared to 2016 when Nigeria was neck deep in a recession.
What does this mean?
- Nigerians earned more in nominal and real terms in 2017 compared to 2016. This suggests there is more money available for Nigerians to spend compared in 2016.
- Nigeria exited recession in the second quarter of 2017 as economic activities picked up following 6 quarters of negative growth. The economic recession meant several employees lost jobs or saw their wages decrease in nominal and real terms as employers reduce expenses to stay afloat.
- Labour force participation as at the second quarter of 2017 was 85 million out of which about 51 million were categorized as having full employment. As at the end of 2016 labour force participation was 81 million while those in full employment was about 52.5 million.
- Despite the rise in employee salaries and wages in 2017, the over 48% decline in the exchange rate between 2014 and 2017 has basically halved the purchasing power of Nigerians despite the rise in real terms.
- Using an estimated population of 52 million, the data suggest average employee wages for 2017 was about N505k or N1,404 per day.
