According to the World Bank, Nigeria’s 2019 minimum wage of N30,000 is now equivalent to N19,355 after discounting for current inflation.
The World Bank made this announcement on Thursday in Abuja at its Nigeria Development Update and Country Economic Memorandum.
They urged the Nigerian government to increase investment stimuli such as easy access to capital, trade, and energy production.
The Bank cited that Nigeria’s nominal minimum wage in 2019 was N30,000, which is equivalent to $82 in dollar terms, as evidence that the total inflation between 2019 and 2022 was 66%.
The real minimum wage in naira in 2022, after discounting for inflation, is N19,355, according to the World Bank, who also stated that in dollar terms, it is $26 in 2022 “after discounting for both inflation and exchange rate depreciations.”
They continued, “The exchange rate on the parallel market declined from N367 to N760.
They also disclosed seven key evaluations of Nigeria’s growth performances over the previous 20 years, ranging from deteriorating macroeconomic stability to an excessive reliance on oil exports:
- Macroeconomic stability steadily deteriorating over the past decade as Nigeria lags behind Africa in its Macrostability Index at 30 points, compared to 90 for sub-Saharan Africa.
- Past growth performances of the Nigerian economy were directly linked to the pace of reforms, they said.
- Nigeria lacking in large and mid-sized formal productive firms,
- Over-reliance on oil exports has hindered economic diversification.
- Slow Structural transformation and job creation pace in Nigeria.
- Employment growth not occurring in subsectors with the highest labour productivity growth, thereby dragging down value added.
- Lack of economic transformation hindering poverty reduction.
The Bank noted that a selected priority of reforms would be needed to plot a new growth path.
What you should know
The rate of inflation in Nigeria increased to 21.47% in November from 21.09% in October, marking the tenth consecutive month of growth since the year’s beginning.
The inflation rate in Nigeria has now reached its highest level since September 2005, when it was 24.32%.
The NBS claims that the persistent currency depreciation and an overall increase in the cost of production are to blame for the increase in the year-over-year inflation rate. Import costs have increased as a result of this.
One of the most closely watched indices, food inflation, increased to 24.13% in November 2022 from 23.72% in October 2022. Price increases for bread and cereals, oil and fat, potatoes, yams, and other tubers, food items, and fish were the main contributors to the rise in food inflation.