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Nigerian workers earned more on paper in 2024, but the real value of their earnings fell due to high inflation, according to data from the Central Bank of Nigeria (CBN).
The data shows that the real value of employees’ earnings dropped by about ₦2.79 trillion in 2024.
In real terms, workers earned ₦25.48 trillion during the year, down from ₦28.27 trillion in 2023.
This is a decline of 9.85 percent, meaning workers were able to buy less with their income.
At the same time, total earnings increased in nominal terms. Employee compensation rose by 18.43 percent, from ₦63.83 trillion in 2023 to ₦75.59 trillion in 2024.
The figures do not show whether the data apply only to public sector workers or include private sector employees as well.
The difference between higher nominal pay and lower real income shows the effect of inflation.
Although workers received more naira, rising prices reduced what that money could buy. Compensation of employees includes wages, salaries, and other payments such as allowances.
Inflation remained high throughout 2024. Nigeria’s inflation rate was 29.90 percent at the start of the year and increased to 34.80 percent by December.
Commenting on the data, Segun Ajibola, a former president of the Chartered Institute of Bankers of Nigeria, told Punch that the key issue for workers is purchasing power, not just pay increases.
“What is important in terms of wages and salaries is the real value of your purchasing power, which is a function of your disposable income or take-home pay,” Ajibola said.
Ajibola said rising prices and the weaker naira have reduced the real value of incomes.
He explained that even with the ₦70,000 minimum wage introduced in 2024, higher pay does not always translate into better living conditions because the cost of basic necessities such as food, transport, rent, and school fees has risen faster than incomes.
“Nominally, you’ve earned more, but in real value, you’ve earned less, which literally means you are poorer,” he said.
Ajibola also noted that the situation is worse for workers in the informal sector, where wages are often low, and job protections are limited.
“The cost of living in the country is beyond the increases, if any, in nominal income. That has caused a serious erosion in the real value of income,” he said.
Meanwhile, Yinka Ogunnubi, president of the Association of Corporate Treasurers of Nigeria, said wages usually rise more slowly than inflation.
“Usually, inflation starts, and remuneration tries to keep pace. It’s not always the case. Inflation gallops, and everybody is trying to keep up,” Ogunnubi said.
Ogunnubi said some employers have increased pay to help workers cope with higher costs, while others have not.
“There are some employers that have been very pragmatic and are doing the right thing. Some don’t.”
According to the data, Nigerian workers were poorer in real terms in 2024, even though their earnings were higher in naira terms, because inflation decreased their purchasing power.
