Over 70% of Nigerian income earners regularly provide financial support to extended family members or friends, according to the latest PiggyVest Savings Report 2024.
Published by PiggyVest, the report shows the extensive financial burden many Nigerians face due to the black tax.
According to the report, while 46% pay black tax monthly, 25% do so occasionally. This cultural obligation, although rooted in community support, significantly affects the financial stability of individuals in a challenging economic environment.
The report noted, “Black Tax still remains a significant expense for Nigerians. According to our survey, almost 1 in 2 income earners consistently set aside a portion of their monthly income to support extended family members. This extra financial burden puts additional pressure on already limited resources, especially in a struggling economy,”
Also, the report reveals that about 43% of Nigerians do not save at all, making black tax a considerable strain on already limited financial resources. For those who do save, the added pressure of black tax can hinder their ability to build a secure financial foundation.
Over 1 in 3 Nigerians earn below N100,000 monthly
- In addition to the black tax, the PiggyVest Savings Report 2024 sheds light on the income disparity in Nigeria. More than one in three Nigerians earn below N100,000 monthly, which is barely sufficient to cover basic expenses, let alone support additional family members.
- Also, the report indicates a gender disparity, with men being 1.4 times more likely than women to earn a monthly income of N1,000,000 or above.
- Despite this, women are reportedly more inclined to engage in business ownership, surpassing men in entrepreneurial pursuits.
- However, Generation Z is the least likely demographic to own a business, indicating potential shifts in economic engagement among younger Nigerians.
Nigerians spend N50,000 to N99,999 monthly
- The report also details spending patterns, revealing that a little over one in three Nigerians report spending between N50,000 and N99,999 monthly, making this the most common spending range.
- A similar proportion spends below N50,000, while only about 1 in 100 Nigerians spend N1,000,000 or more monthly, emphasizing the income disparity across different segments of society.
- Also, inflation remains a significant concern, with 83% of respondents indicating that food and groceries are their most impacted expenses.
- This aligns with the rising inflation rates in Nigeria, which continue to erode purchasing power and increase the financial pressure on households.
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The report also noted that compared to the previous year, the proportion of Nigerians earning over N500,000 monthly fell sharply from 14% to just 6%.
- Conversely, those reporting no income rose from 20% in 2023 to 28% in 2024, suggesting an alarming increase in unemployment rates.
- This downward trend in income has intensified the economic pressures on individuals, making it harder for them to meet basic needs.
- In terms of spending, nearly 90% of respondents reported an increase in their general expenses, with significant hikes in transportation and utility costs.
- Food remains the primary expense for most Nigerian households, with 83% of respondents citing it as their largest expenditure.
- The report highlights the extent to which inflation has strained household budgets, pushing many Nigerians into difficult financial circumstances where affording even basic necessities is a challenge.
- The report also sheds light on the state of savings among Nigerians. Approximately 21% of respondents indicated they were in some form of debt, usually owed to family members and friends.
Also, 10% of respondents reported beginning to contribute to an emergency savings fund within the last year.
These savings behaviours reflect a growing awareness of the need for financial preparedness, though the overall savings rate remains low, with many Nigerians struggling to set aside funds due to ongoing economic constraints.
