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| Picture used to illustrate the article SOURCE: ubagroup.com |
Banking is a well respected profession in Nigeria. Once you work in the bank in Nigeria, everyone thinks you have hit a gold mine. What informed such thinking may be the mode of dressing of the bankers – always on suits – having access to and counting lots of money everyday etc.
But that is not usually the case when you meet them. Not only do they not carry around with them crisp new naira notes, they certainly do not dish around money just because they work in the bank even though the assumption is that they earn big.
Although, as a noble profession, bankers are supposed to be paid very well going by the efforts and expertise they bring to the job. In many climes, banking job is one of the lucrative jobs, but that can’t be said about banking job in Nigeria. What most Nigerian bankers enjoy is the conducive environment they work in (excluding the marketers who are sent out under the scotching sun looking for prospective depositors to meet unrealistic targets).
Good remuneration for bankers is one of the disincentives to stealing of both depositors funds and banks money.
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Why Most Nigerian Bankers not Rich
Unequal Pay Structure
Nigerian banks salary structures are skewed to favour few staffers who are at the top echelon of the banks managements. Nigerian banks CEOs are among the highest paid CEOs in Nigeria. Two of banks CEOs made list of top 10 earning CEOs in Nigeria. Despite being the most profitable sector in Nigeria and the second largest sector by market capitalization behind consumer goods sector, the majority of the workforce are paid peanuts as low as N75,000 per month with no hope of promotion and/or salary increment.
How much Nigerian banks pay their staff?
The top brass earn as high as N400 million per year, while the low ranking staff earn as low as N900,000 per year.
We understand that the top management staff have the responsibility for piloting the affairs of the banks and ensuring profitability of the business, take the knock when things go wrong and equally receive praise when things are looking up, and as such should be well remunerated. But then, the salary gap between them and the foot soldiers who work to actualise the management vision is very wide.
Contract Staffing
Nigerian banks are in the habit of hiring contract staff. According to statistics, Nigerian banking sector has the highest rate of contract skilled workers. These contract workers work for as long as 5 – 8 years without salary increase, and with no hope of getting full-time staff status. Banks only either renew their contracts or lay them off when their contracts expire, and then hire new and young contract workers.
According to statistics by National Bureau of Statistics, over 42 percent of bank workers are contract staff, while 1/3 of the full-time staff are senior staff members. These data undoubtedly do not represent what is visible in an average Nigerian bank branch where out of 20 employees, only about 4 will be full-time staffers with job titles like branch manager, customer care manager, marketing manager, and branch accounting officer.
The contract staff employees make up a greater number of those we consider as bankers in our friend and family circles, and whose ego won’t let them disclose their job status to us. I have some friends who had worked in the banks and were honest enough to tell me their employment status and how much they earned.
Job Insecurity
High Rate of Unemployment
According to data by Nigeria Bureau of Statistics, Nigeria’s unemployment rate in 2022 rose to its all-time high of about 33 percent as against about 11 percent in the past 5 years, which is second highest globally. This means out of about 200 million population, about 66million are jobless. Although, data released by NBS in Q1, 2023 shows that Nigeria's unemployment rate has fallen to 4%. According to indices used by the national office of statistics, any Nigerian who engages in economic activity for at least 1 hour per day is employed. We all know that job in Nigeria is measured in months and wages are paid monthly, and not per hour. Therefore, the 4% rate of unemployment is not realistic. It's still reasonable to say Nigeria's unemployment rate is still hovering around 33% recorded last year where job was measure per month.
Due to excess supply of labour in the labour market, the employers of labour, who provide the few jobs are not willing to pay much, and job seekers have little or no choice than to take up the jobs not minding the pay, considering the responsibilities they have. These bankers have the responsibility of supporting their family and friends who have no jobs.
Inflation
The rising inflation in Nigeria also contribute in impoverishing the Nigerian bankers. Imagine one receiving same amount of salaries over 5 years in a country where headline inflation rate is above 27.3 percent as of October 2023 and rises year-on-year.
In the face of rising inflation in Nigeria, which is impacting negatively on the purchasing power of Nigerians, even if the bankers receive increased salaries, it would not make much difference in their lives like in every other group of the population.
Borrowing and Debt
Many bankers live borrowing and debt life. With their financial knowledge, they know where to get loans, and as salary earners, they are targets of lenders. Banks and other financial institutions easily give them loans, which repayments are tied to their salaries.
In a financial system such as Nigeria’s that is beginning to leverage BVN and financial technology to create credit, bankers have become the targets of instalment payments and 24hour and quick personal loans because of their fixed salary date and perceived integrity.
They have the habit of buying things on credit and hire purchase, to make payments on their pay days. Borrowing money because you have where you can borrow from, and buying commodities on credit because you have who can sell on credit to you, you are likely to live borrowing and debt life.
Some banks compel their staff to take the banks' loan products and to buy luxury items from their partners and suppliers as a way of patronage and to appear rich before their customers.
The costs of financing these loans deny the bankers the ability to have savings, and further impoverish the bankers who are not well paid in the first place.
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