Inside PiggyVest 2024 Savings Report: How Nigerians Are Adapting to Financial Pressures And A Shift in Savings Priorities

PiggyVest, one of the largest online savings & investing platforms in Nigeria, recently released its 2024 savings report, highlighting how Nigerians are adapting to financial pressures, which has spurred a shift in savings priorities.

This year’s edition, dives deeper into Nigerians’ saving, spending, and investing habits, providing a clearer picture of how people are managing their finances during these challenging times in the country.

It is understood that economic devaluation towards the end of 2023 has significantly impacted the Nigerian economy. Inflation has risen to 32.1%, levels not seen in almost 20 years, and with it, the prices of essential items have significantly increased.

One notable area of interest revealed in the report, was the earning power of average Nigerians. Compared to 2023, the number of Nigerians who reported earning above N500,000 dropped from 14% to 6%. Respondents reporting no income grew

from 20% in 2023 to 28% in 2024. In the area of spending, almost 90% of respondents reported an increase in general expenses, with respondents citing significant increases in transportation and utilities.

Food holds its position as the primary expense for most Nigerian households. 83% of respondents named food as their major expense. 21% of respondents say they are in some form of debt, usually to family members and friends, and 10% say they started funding an emergency savings account last year.

The report reveals that over 37% of Nigerians earn below N100,000 monthly, highlighting the low earning power affecting a significant number of the population. Of the respondents who reported having a monthly income, a little more than 7 in 10 said they rely on only one income stream, while less than 3 in 10 rely on two or more income streams.

The top three income sources for single-income earners include salary and wages from one job, personal business, and allowance from friends, family, or partners. For multiple-income earners, entrepreneurship and investments helped to supplement their primary incomes from paid employment. Other income sources for them include allowances from friends, family, or partners, as well as pensions, gratuities, or retirement funds.

Spending Patterns and Priorities

The report highlights that 83% of respondents cited food and groceries as their top monthly expense, underscoring the priority of basic needs in 2024. Spending patterns also show that more than one-third of Nigerians report monthly expenses between N50,000 and N99,999, while only about 1 in 100 Nigerians spend N1,000,000 or more. Rising inflation has further strained these budgets, especially for those in lower income brackets, who face a growing challenge in managing their purchasing power amidst high living costs.

Transportation comes in at a very distant second, with 43% of Nigerians citing it as a major cost. In the past year, the removal of fuel subsidies has led to an unprecedented rise in petrol cost, and as a consequence, a hike in transportation costs. Utility bills, which include essentials like electricity and airtime, follow closely at 38%.

Clothing and personal upkeep and Childcare come behind at 35% and 24%, respectively. Housing/Rent now ranks sixth among the biggest personal expenses for Nigerians, behind childcare and food. Just a little over two in ten Nigerians list it as a top expense, compared to nearly 4 in 10 in last year’s report, marking a drop of two positions from within a year.

Healthcare and fitness, personal education, family support, entertainment, and religious obligations represent more minor yet notable categories, with religious obligations being the least significant at just 4%. Hence, while these areas represent the financial commitment of Nigerians, they are far from the dominant drivers of personal expenditure in 2024.

Savings Goals: A Shift in Priorities

When asked about their saving habits, 57% of respondents indicated that they save a portion of their monthly income. This group is comprised of 47% who save consistently every month and 10% who only save occasionally.

This marks a concerning decline when compared to the PiggyVest Savings Report 2023, where 64% of Nigerians reported having a savings habit. Odun Eweniyi, COO of Piggyvest, attributes this sharp decline within one year to multiple factors. According to her, economic pressures, such as inflation and a significantly higher cost of living, are undoubtedly squeezing disposable incomes and making it harder for people to save.

“The high cost of living makes it increasingly difficult for the average Nigerian to allocate funds for savings after covering essential expenses. Financial insecurity brought on by job instability and increasing household expenses could also be discouraging regular savings,” she adds.

In a notable shift, the popular “Japa” (emigration) goal dropped from third place in 2023, when it represented 21% of savings priorities, to just 10% this year. Goals like personal education, buying a car, and securing housing now top the list, reflecting changing priorities and financial planning among Nigerians.

Debt remains a significant issue, with 45% of Nigerians in debt owing friends or family. Major expenses, such as rent, education, and weddings, are the primary causes of debt, accounting for 26% of cases, while business expenses closely followed by contributing factors.

Resilience Amid Rising Expenses

In 2024, nearly 9 in 10 Nigerians reported higher general expenses compared to last year, reflecting the strain of ongoing inflation. Despite these financial pressures, almost 1 in 10 Nigerians now have emergency savings, demonstrating resilience and an increased commitment to financial preparedness even as fewer Nigerians are able to maintain consistent savings habits.

This year’s PiggyVest Savings Report captures a snapshot of Nigerians’ evolving financial landscape, with an emphasis on resilience, shifting priorities, and the challenges of navigating economic pressures in pursuit of financial stability. Nigerians’ average income is depleting as its economy is also tanking as a result of low growth and lack of productivity.

Per capita income earned by an average Nigerian has plummeted by a staggering 72.8 percent, the lowest since 2004. The slump is as a result of policy missteps made in the last decade that have weakened the Nigerian economy and worsened citizens’ living conditions, according to SB Morgen, a Lagos-based data and intelligence gathering firm.