Africa: 2023 Inflation and Salary Increases
Africa Salary Increases
Salary increases are inescapably linked to inflation; where inflation is one of the most important determinants when deciding on the amount of the salary increase. Other factors must also be taken into consideration such as financial constraints of the employer, growth rates in the country and general market and/or economic conditions.
The next consideration is to determine a “real increase”. A real increase is defined as the increase after inflation has been considered. As an example, if the salary increase is 6.0% and inflation is 5.0%, then a 1.0% real increase has been granted.
Future inflation is usually employed as this more accurately compensates the employee for the expected ravages of inflation and the negative effect on their purchasing power in the new year- rather than historic inflation.
While this is undoubtably the correct methodology to derive a scientifically formulated salary increase which is equitable to all stakeholders, inflation forecasting errors do occur. 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 higher imported inflation. Further, food prices are constantly influenced by bad harvests and adverse weather conditions.
Given this, before one commences with the new salary increase exercise, it is prudent to look in the rear-view mirror to ascertain the actual “real salary increases” employees received the previous year. In the table below we have calculated the average 2023 inflation rate for selected countries, together with the Axiomatic recommended salary increase for 2023 which we suggested in January 2023. The final column displays the real salary increase or decrease:
Represents Axiomatic’s forecast
Clearly, employees in Ethiopia and Ghana received a significant negative real increase in 2023. Employees in Angola and Zambia were also negatively affected by unexpectedly high inflation albeit to a lesser extent.
While the normal practice is not for the employer to “make good” the negative real salary increase in 2024, cognisance should be taken of the erosion of the Ethiopian and Ghanian employee’s net pay in 2023, if possible.
About Axiomatic
In addition, we have significant experience integrating the payroll platform with SuccessFactors, Workday, and other related systems.
Should you wish to know about our offering, please:
COOKIE POLICY
Welcome to our website.
1. Introduction
This Cookie Policy explains how we use cookies and similar technologies on our website axioconsult.com. This policy is designed to help you understand what cookies are, how we use them, and the choices you have regarding their use.
2. What Are Cookies
Cookies are small text files that are stored on your device (computer, tablet, or mobile phone) when you visit certain websites. They are widely used to enhance your online experience by remembering your preferences and actions over time. Cookies are not harmful and do not contain personal information like your name or payment details.
3. How We Use Cookies
We use cookies for various purposes, including:
- Essential Cookies: These cookies are necessary for the basic functioning of our website. They enable you to navigate our site, use its features, and access secure areas.
- Analytical/Performance Cookies: These cookies help us understand how visitors use our website. They provide information about which pages are visited most frequently, how long visitors stay on each page, and whether they encounter any error messages. This data helps us improve the performance and usability of our website.
- Functionality Cookies: These cookies allow our website to remember choices you make (such as your username, language, or region) and provide enhanced, personalised features.
- Targeting/Advertising Cookies: These cookies are used to deliver advertisements that are relevant to your interests. They may also limit the number of times you see an ad and help measure the effectiveness of ad campaigns.
4. Your Cookie Choices
You have the option to manage your cookie preferences. You can usually modify your browser settings to accept, reject, or delete cookies. Please note that if you choose to block or delete cookies, some features of our website may not function properly.
5. Third-Party Cookies
We may allow third-party service providers to use cookies on our website for the purposes outlined in Section 3. These providers may also collect information about your online activities over time and across different websites.
6. Updates to This Policy
We may update this Cookie Policy from time to time to reflect changes in technology, law, or our data practices. Any changes will become effective when we post the revised policy on our website.
7. Contact Us
If you have any questions about our Cookie Policy or how we use cookies on our website, please contact us at
By continuing to use our website, you consent to the use of cookies as described in this Cookie Policy.