On the 31st of October, PiggyVest released the maiden edition of what will become an annual release; the PiggyVest Savings Reports, offering interesting insights into how Nigerians earn, spend, and save money in 2023.
Our major highlights from the report:
-
20% of Nigerians report earning no income.
-
“Japa” is the third most common goal among Nigerian income earners (Rent being the first, and debt settlement being second)
-
Only 1 in 4 Nigerians have emergency funds stashed to last them the recommended six months duration (income earners inclusive)
-
Over 20% of Nigerians do not save their income
-
3 in 10 Nigerians make less than N100,000, representing the largest segment of income earners in Nigeria
-
Gen Z income earners are least likely to have more than one stream of income.
-
Feeding and black tax top the list of income suckers for many Nigerians.
-
Only 4% of Gen Zs, income earners inclusive, have emergency funds.
The average adult Nigerian makes career decisions, actively or inactively, on a daily. It’s like a linear thread that stretches till retirement —or death. From seeking job opportunities, negotiating offers, and navigating current jobs, to resignation or career transitions, relocation, and ultimately building long-lasting wealth. Finance is the undertone in all of these; the major consideration before taking any step, including the infamous “migration”, notorious for being a major relocation push among young Nigerians.
Interestingly, 64% of respondents claim to save some amount of their income every month, which is quite high compared to 21% who do not save at all. Yet, these savings have an end —to leave the country, and if we examine clearer, to access more income-making opportunities through migration or self-development. The only thing competing with this is rent, a given.
I spoke, briefly, with PiggyVest’s Daniel Orubo, who served as Producer and Data Analyst on the project, and he shared insights into the financial culture of workers in Nigeria.
What would you attribute the savings behavior of Nigerians to? Inflation, low income, or financial illiteracy?
DO: I think it’s usually due to a mix of all three. It’s tough to convince people of the value of saving when they are just trying to survive, but it’s also important to remind them that having savings is essential and potentially life-saving. That’s why one of the questions we asked was “If you suddenly had a ₦100k emergency, how would you find that money?” and I was glad that many people said through their savings. It’s just a way to show that when emergencies come (and they always do), it can be very daunting if you are not prepared. It’s why you find Nigerians flocking to these predatory loan apps. That’s part of what we’re trying to teach people at PiggyVest; you can always afford to save for a rainy day, no matter how little you are earning.
And what’s the best bet for growing savings and having a strong emergency fund?
DO: One of the primary things we preach with regard to financial literacy is the importance of trying to increase your earning power. Find a way to earn more if you can. Find a way to use whatever skills you might have to increase your income because, at the end of the day, you can only save from what you have.
But it’s also important to save even when you are earning less than you’d like, to build up the habit, or else you could find yourself struggling to save even when you suddenly start earning more. I recently spoke to someone who earns over ₦2 million and still has next to no savings. It’s a vital habit to form as early as you can.
Times have changed and employees no longer stay for many years at a single job like before. Is job hopping an effective way of increasing income?
DO: I think it can be, but I don’t think income is the only thing to consider when the topic of job hopping comes up. The value of it depends on what your career goals are. If you are considering job hopping, you need to ask yourself if the place you want to move to will offer you more — be it income, experience, or opportunities — than the place you’re leaving. I don’t like the idea of job hopping just for the sake of it.
Job hopping works for some people and for some, it doesn’t. I, for one, can’t imagine telling someone at Paystack or Piggyvest to job hop, even if they find a company willing to pay them more. Those companies show genuine love to their employees and give them room to grow — two things that feel radical in today’s draining job market. Will you get somewhere else to give you that? These are the things to consider before making the leap.
So, money shouldn’t be the major consideration for people seeking new jobs or looking to make transitions?
DO: I try not to deal in absolutes. Money can be your major consideration if that’s what matters the most to you at this point in your life — you could have debts you need to clear. For me, career fulfillment is the most important thing right now, but that doesn’t mean I will take a job that pays peanuts. I believe there should be a balance, and I think we should always consider the future, not just the now.
For example, if you are new to the workforce, I think it’s wiser to prioritize experience over money. Look for companies that will allow you do impactful work early on and make you more attractive for future employers. That’s why I love working with startups; you get to try your hands at a lot of things, and that makes you inherently more employable.
So, considering all the complexities of work in Nigeria, what income range would it take for the average Nigerian worker to live comfortably?
DO: Who in Nigeria is living comfortably? Even if you’ve gotten a raise this year, the value of your salary this month is not the same as it was six months ago. Personally, as a Nigerian working in Nigeria, I do think I’m paid pretty well, but I’ve still had to cut out some items from my grocery list. For instance, I prefer turkey over chicken, but I have stopped buying it because it keeps getting more expensive. Comfort is subjective. I know people who can comfortably survive on 500k and who run through that in a week.
So, while I can’t name a figure, the only thing I’ll say is: always be trying to make more. Don’t let anyone make you feel guilty for demanding what you believe you’re worth. If you are doing valuable work at a company, for instance, record it and keep those receipts. Never get complacent about what you are earning; always try to up it, either by asking for a raise in your current company or, if it serves you, taking on a new role.
For 2024, Daniel says the PiggyVest Savings Report will be more expansive, taking into consideration the location and roles of the people they survey.