Very recently, it has been a frequent debate about whether or not software developers in Nigeria are underpaid. While some maintain that they are not underpaid and the pay they get only matches their output, others argue that they are highly underpaid, and even that results in the poor quality of apps that are churned out.
I have had a tough time pulling up statistical data about Nigeria (and this should be improved upon), so I decided to augment my fact-sheet by doing a sampling amidst my developer friends. I must say, however, that agreed, that my sample space is largely limited, I am going to assume that it is representative of the true scenario; which should not be much of a departure from the true scenario. Also, my thoughts assume that the typical “Nigerian Developer” lives in Lagos.
Because of easy and quick access to data, I will do my comparison between the United States and Nigeria.
My opinion on the issue is, yes, Nigerian developers are underpaid! My argument covers the two major means through which developers earn –freelancing and the regular 9 to 5 software development jobs.
First, freelancing. To build an app in the US (a relatively simple app, not many features), the price ranges between $5k and $10k according to this post. For those that charge on hourly basis, it could cost about $80-100 an hour according to this post, usually for an average duration of –let’s say 80 hours (about 9 hours a day ~ 9 working days ~ 2 weeks). That gives between $6.4k and $8k.
There is a certain platform that one can use to estimate the prices of apps; here you can check out the prices according to features of the app.
In Nigeria, on the other hand, from my admittedly small sample space, an app of similar configuration as above- simple and not so many features will cost about N300k that’s about $1.49k (at today’s exchange rate of N201.05 to $1).
This pricing difference is very glaring, especially because people will expect products of equal quality.
A full-time developer in the US earns about $76k a month according to this infographic. While in Nigeria, finding the average earning of a developer proved difficult, I’ll fallback to my sample space, which suggests that the median earning of a developer is about N100k a month, translating to N1.2m –about $5.97k per annum.
By now you must be thinking that it’s parochial and misleading to focus on just the figures without considering other economic factors, such as the value of the currency, inflation rates and costs of living. Well, you’re right; now, let’s make some adjustments.
I am not an economics major and my knowledge of economics is quite limited, but I do know that the simplest measure of comparing a person’s income in one country to another is the Purchasing Power Parity (check the simple English version here). Simply speaking, it tries to estimate the value of consumer goods you can buy in a country with a certain amount, compared to that in another country.
The goal of using this method is to find the equivalent income in various countries. One could go about using the Big Mac index, i-pad index or other measures of PPP to calculate this value. Luckily, there are a number of calculators available online, of which I found these two easy to use:
So, to backup my claim that indeed Nigerian developers are underpaid, I’ll compare using these two tools, how much an average developer earns in Nigeria and how much this earning translates to in the United States.
Results from Numbeo (A), shows that to maintain the same standard of life that one can live with $6,600 in San Francisco, one would need $2,864.60 (N575, 928.60) in Nigeria. Essentially that means that $1,000 in San Francisco (US) is equivalent in purchasing power to $434 in Nigeria.
Result from B above, shows that $1000 in United States is equivalent to $465 (about N93, 480) in Nigeria.
For clarity’s sake, I’ll illustrate this observation with a table,
|Country||Freelance, building app ($)||Full-time job, per year ($)|
|Average actual cost||Adjusted cost by A||Adjusted cost by B||Average actual cost||Adjusted cost by A||Adjusted cost by B|
Let’s now discuss the table, average cost for building an app in the US is about $7,000, while in Nigeria, it costs about $1,490 (~N300,000). Going by the PPP comparison, adjusting the cost in the US to Nigeria, the app should cost at least $3,000, which means that building an app in Nigeria costs less than half of what it should be (assuming price in US to be the reference).
While, there are even more factors to consider, like cost of Internet access, taxes, cost of transportation, etc. I believe the PPP is sufficient to demonstrate that the prices in Nigeria are low compared to those in the United States.
This is just a summary of my thoughts; I’m very open to corrections and suggestions about them :)
Disclaimer: Many of the ‘facts’ here are based on the Author experiences and people’s responses about their personal experiences.
About the Author
Nigerian startups raised $377m in 2019, more than twice what they did in 2018. Find out more when you download the full report.