We are rapidly approaching that time of the year where Compensation and Benefits practitioners are required to magically conjure up proposed salary increases for the budget cycle, for the African countries within which they operate.
Our preliminary research for our annual Africa Salary Increase Recommendations report, which covers 40 African countries, and is due for release in December, has begun in earnest. We’d like to share with you some of our initial findings...
Although growth has improved slightly, challenges remain. Difficult business conditions and poor infrastructure have hampered the pace of the recovery. In addition, several
economies are burdened with high levels of public debt and sustained security concerns.
Growth has not been uniform across the region. South Africa, Nigeria and Angola have experienced significant difficulties over the last two years causing these countries to drag down the overall average growth of the region as illustrated in the graph below.
Inflation in African countries is notoriously difficult to predict for the primary reason that it is extremely sensitive to two important drivers namely, local currency and food prices. The foreign exchange markets in African countries are illiquid and thus any depreciation in the currency tends to be over exaggerated with the consequence of imported inflation. Further, food prices are constantly influenced by bad harvests and adverse weather conditions.
Nevertheless, this is probably the most important input when calculating salary increases.
If you want any additional information, please contact our
Senior Partner, Brett Hopkins, at email@example.com