Compensation Packages Is the wage gap between expats and locals a function of the market or plain discrimination?

Expats across Africa often lead a charmed life, earning far more than their local counterparts even when they have less experience and local knowledge.

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Expat compensation packages are swelling in Ghana as the rising cost of living and other factors make it more challenging to attract international talent.

Expat wages up to 900% higher than for local employees, that is according to the global development professionals network research.

Expats abound on the African continent. They work in NGOs, and in for-profit companies. Some public sector organisations such as government ministries have expats providing technical assistance as part of a donor package.

 

The life of an expat in the Ghana is generally a good one, and usually far superior to the life they left behind.

Imagine finding out that your colleagues earn five times more than you. Not only that, but they get all sorts of benefits you’re not eligible for.

They take a month of leave; you get 12 days. Your employer pays for their accommodation, health insurance and even their children’s school fees; you don’t get any of that.

But you have comparable skills and qualifications. You do the same work. In fact, you understand the context of your work better than your higher-paid colleagues.

So why are they earning so much more than you? Is it simply because of your nationality?

READ ALSO: Here is how much banks in Ghana charge on mortgage loans

When the expat is recruited they are often paid a relocation allowance to move, given a house in a plush part of town, have their children’s school fees paid (if they have any), and get a ticket to travel back ‘home’ (with their family) at least once a year.

In Ghana, expats are predominantly white. In a few cases, second generation Ghanaians from the UK/US or middle-class Ghanaians who went abroad to attend university manage to find jobs in Ghana as expats before they move back ‘home’.

The incentive for a Ghanaian to aspire to expat status is high. This is the typical example a of package an expat is likely to get as compared to a local folk.

An expat marketing manager working for a telecommunications company in Ghana can earn
- Salary – US$10,000 per month;
- Full medical coverage; • Use of corporate car with a fuel allowance;
--Accommodation in a plush part of town; and
- Two vacations home a year with tickets for up to five family members.

A local marketing manager with the same qualifications will earn somewhere in the region of US$3,000-5,000 and will have no housing allowance. And that type of package is still rare to get. This ‘local’ marketing manager very likely has the same qualifications as the expat manager and may even have attended the same schools abroad.

READ ALSO: Why big banks in Ghana are fleeing the mortgage market

Local and foreign staff in the same organisation can be on entirely different packages – fair?

Not long ago, Japanese company, Mitsui Ocean Development and Engineering Company, fired fired all of the local workers at its Jubilee Oil Field operation. The local workers were aggrieved by the alleged difference in wages between themselves and expatriate workers, whom they claimed earned up to three times, in some cases despite having the same responsibilities.

 

According to the workers, they received an average of Ghc2,500 (US$775) to Ghc3, 000 (US$931) a month while their expatriate counterparts take an average of about 5,000 to 10,000 dollars.

In AngloGold Ashanti which is a mining company, the minimum salary of a mineworker is $262.00 per month which is about 340 times the salary of the highest paid executive in Ghana. While in the same the company the average expatriate salary is $19,586.00 per month compared with the Ghanaian Senior Officer who earns $711.00 per month doing the same or similar job.

This obviously is a cause of worry.

Analysis

I recount when I worked on a project with an intern from Canada who actually earned much more than me as a staff. She knew absolutely nothing about the job or the local context and my salary was not even one-fifth of a fraction of hers.

The complexity of running an expat salary and payroll presents may be challenging when exchange rates, local statutory compliance, income taxation at home and in the host country, and the duration of the employment contract are taken into consideration.

However the disparity between expat salary and locals can be very discriminatory.

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