Wages in Africa growing at a faster rate than anywhere in the world

While wages in Africa appear to be growing at a rapid rate compared to other regions of the world, wages across the globe do not appear to be growing in real terms when accounting for inflation in various markets. This according to new research from global consultancy Korn Ferry and analysis from Consultancy.org.

When measuring wages in nominal terms, the research found that wages are increasing faster in Africa than anywhere else in the world, particularly compared to the western world where wages appear to have stagnated to some extent. In North America, for instance, wages growing at 2.8%.

Wages in Western Europe are growing even slower, currently increasing at 2.5%, which is the same rate of growth as that being registered in Oceania. Africa, meanwhile, is seeing wages increase by as much as 7.7%, which is substantially higher than Eastern Europe, which is in second place with 6.6%.

Latin America and Asia respectively are also registering high increases in nominal wages, but analysis shows that the growth rates drop considerably when perceived in real terms for most of these regions. When accounting for inflation, most regions across the globe register wage increases of less than 1%.

In Africa, for instance, inflation is currently at nearly 7%, which puts the wage increase at approximately 0.9% in real terms. Only Asia and Eastern Europe registered real wage increases of higher than 1%, with an increase of 2.6% and 2% respectively, accounting for inflation of 2.9% and 4.6%.

This is primarily due to the rapid rate of economic growth in these regions, which is keeping the rate of growth in wages well ahead of inflation rates, although the rates in these regions also appear to be slowing when compared to figures from pervious years.

Despite being a rapidly growing economic region, Africa is yet to curb its high levels of inflation, which are associated with the high dependence of economies across the region on the oil and commodity trade. As oil and commodity prices have crashed, so have the currencies across these economies.

Nevertheless, it is impractical to generalise the trend for all of Africa, given that a number of economies are currently engaged in active efforts towards diversification, and are currently enjoy strong currencies. East Africa is one such region that is politically and economically stable, and is drawing high levels of investment.

The Western African nation of Ghana, however, emerged as one of the strongest economies in terms of wage increase. At nominal wage growth of 14%, the country is the second strongest performer after Turkey, which registered growth of 20%.