Bank employees have seen salary increases ranging from 9 to 52 percent as a result of the Federal Government’s elimination of fuel subsidies, according to a KPMG Nigeria research.
The Punch reported that in September, a report titled “2023 Survey on Employers’ Response to Fuel Subsidy Removal in Nigeria” was released.
The analysis found that in 2023, as a result of the removal of fuel subsidies, employers had adopted pay increases ranging from 19% to 40% in the whole sector.
According to KPMG, because of the removal of fuel subsidy announcement’s suddenness, most employers were unsure of how to react, especially given the business problems presented by the current economic climate.
The price of petrol at the pump has climbed since the subsidy was removed from between N189 and N194 per liter as of May 2023 to between N577 and N617 per liter right now, depending on where you are in the country. There has been an increase of 205% to 218% as a result.
The National Bureau of Statistics reports that the cost of intra-city bus transportation in Nigeria increased on average from N649.59 in May 2023 to N1,285.41 in June 2023, a 979 percent increase. This increase is mostly attributable to the rise in gas pump prices.
Wema Bank PLC increased employee pay in the months after the subsidy was removed to lessen the impact. Guaranty Trust Bank PLC likewise increased pay for contract and junior employees, with cleaners earning between N70,000 and N80,000 and drivers earning between N140,000 and N150,000 per month.
According to personnel level, Zenith Bank PLC has increased compensation overall by 25% to 50%, with cleaners and drivers now making between N80,000 and N120,000.
Additionally, according to KPMG, more staff buses were ordered by Fidelity Bank PLC, GTB, and Zenith Bank to lessen the pressure on commuting employees.
Some state governments have provided palliatives to their employees in the form of pay raises, constrained cash transfers to the poor, free bus rides or reduced transportation costs, among other things.
Approximately 55% of the 164 submissions that made up the report were from organizations in the FMCG, ICT, Payment Systems and e-commerce, Consulting, Oil & Gas (Retail, Marketing and Services), and Financial Services (Banking Institutions) sectors. 97% of respondents work for private sector companies, while the balance of three per cent are public sector entities.
Approximately 18% of respondents work for companies with at least 2,500 employees, while 69% have at least 500 employees.
The report states that businesses from a variety of industries who took part in the survey implemented palliatives such as pay raises, assessments of transportation/car/fuel allowance or voucher policies, and work-from-home options.
According to the survey, some organizations want to remove personnel, boost sales volume, raise prices, reduce other HR costs like training, reduce operating and administrative costs, and absorb costs through a lower profit margin. While some other businesses were unsure about the funding mechanism, others considered donations/grants, budget reallocation, cost reassignment, increased production, etc.
