PiggyVest, a fintech company that offers savings and investment services to Nigerians, has presented its Savings Report for the year 2023. Based on an extensive dataset gathered from its users, the report provides insights into how Nigerians manage their finances in the current year.
The report covers various aspects of the financial lives of Nigerians, such as income levels, income streams, personal expenses, debt dynamics, saving habits, and future financial goals. It also reveals some surprising and disturbing trends that reflect the economic challenges and aspirations of Nigerians.
Income Diversity and Disparity
One of the findings of the report is that 20 percent of Nigerians reported no income, underscoring the diversity of financial situations in the country. This may be attributed to factors such as unemployment, underemployment, informal sector activities, or dependence on family support.
Among those who earn a monthly income, a significant 3 in 10 individuals earn less than N100,000, amounting to about 26 percent. This paints a vivid picture of the financial challenges faced by many Nigerians, especially in the face of rising inflation and living costs.
More so, 25 percent earn between N100,000 and N249,000, 15 percent between N250,000 and N499,000, 8 percent between N500,000 and N999,000, and 6 percent above N1 million.
The report also shows a nuanced approach to income streams, with just over 3 in 5 individuals who earn monthly income relying on a single source, while nearly 2 in 5 have diversified their income.
Also read: Nigerians Spent $1.38 Billion on Paying for Education Abroad in 2022
Expenses and Black Tax
The report sheds light on the core areas where Nigerians allocate their hard-earned income. Food and groceries emerge as the most substantial personal expense, with 87 percent of respondents acknowledging this. This is followed by utility bills at 58 percent, underlining the essential nature of these expenditures.
“Black tax,” which is the financial support offered to family members by income earners, played a substantial role in the financial expenses. Over 4 in 5 Nigerian income earners either pay this tax regularly or occasionally.
Debt Dynamics and Challenges
According to the report, a third of Nigerians (36 percent) admit to being in debt, with Generation X and Millennials exhibiting a higher likelihood of debt compared to their counterparts. According to the report, men are more prone to debt than women.
When asked to whom they are indebted, 4 in 10 Nigerians point to their friends and family members. Loans from friends and family are usually recommended by experts because they have more flexible terms and lower interest rates than other sources.
Loan apps follow closely behind at 26 percent, signifying the popularity of digital lending platforms. Unfortunately, borrowing from certain loan apps has exposed many Nigerians to distressing experiences, including exorbitant interest rates, harassment, and doxxing.
Saving Gap and Future Financial Goals
The report raises concerns as over 20 percent of Nigerians admit to not saving any portion of their income, highlighting issues with financial preparedness. Also, only one in four Nigerians secured sufficient emergency funds to cover the recommended six months of expenses.
Also read: Covidnomics: How to Deliver Food and Money to the Poorest Nigerians
The report also spotlights the diverse aspirations of Nigerians for the next five years, with starting or growing a business standing out as a common objective across all age groups. According to the report, 58 percent of Nigerians intend to start or grow their own business in the next five years.
Other significant goals include relocating to a different country, buying real estate, and a trend among singles prioritizing emigration over starting a family. The report highlights the prominence of “japa,” a colloquial term for emigration from Nigeria, ranking as the third most common financial goal among Nigerian income earners. According to the report, 28 percent of Nigerians plan to relocate to a different country in the next five years. Among single people, 32 percent prioritize emigration over starting a family.
