The latest PiggyVest Savings Report 2024 shows that more than 70% of Nigerian income earners frequently support friends or extended family financially.
The analysis, which PiggyVest released, demonstrates the significant financial hardship the black tax places on many Nigerians.
The survey states that 25% of people pay black tax sporadically, while 46% do so monthly. Despite having its roots in community assistance, this cultural responsibility has a big impact on people’s financial security in a difficult economic climate.
The report stated, “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,”
Additionally, according to the survey, 43% of Nigerians do not save at all, which puts a significant burden on the country’s already meagre financial resources due to black tax. The additional burden of the black tax may make it more difficult for people who do save to establish a stable financial future.
Over one-third of Nigerians earn less than N100,000 monthly
The PiggyVest Savings Report 2024 provides insight into Nigeria’s income inequality and the black tax. Over one-third of Nigerians make less than N100,000 per month, which is insufficient to pay for necessities, let alone sustain more family members.
According to the survey, men are 1.4 times more likely than women to make N1,000,000 or more each month, which also shows a gender gap.
Despite this, women are said to be more likely than men to pursue entrepreneurship and establish their own businesses.
However, Generation Z is the least likely group to own a firm, suggesting that younger Nigerians may be changing their economic activity.
Nigerians’ monthly expenses range from N50,000 to N99,999
According to the survey examining spending trends, a little more than one in three Nigerians report spending between N50,000 and N99,999 per month, making this the most typical expenditure range.
Only around 1 in 100 Nigerians spend N1,000,000 or more each month, while a comparable percentage spend less than N50,000, highlighting the financial gap between various societal groups.
Additionally, 83% of respondents said that their most affected expenses are food and grocery, demonstrating how inflation is still a major worry.
This is consistent with Nigeria’s growing rates of inflation, which are reducing purchasing power and straining households’ finances.
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The percentage of Nigerians making above N500,000 per month also dropped significantly from 14% to just 6% in comparison to the prior year, according to the survey.
On the other hand, the percentage of people without income increased from 20% in 2023 to 28% in 2024, indicating a concerning rise in unemployment rates.
As a result of this income decline, people are under more financial strain and find it more difficult to meet their fundamental demands.
Nearly 90% of respondents said their overall spending has increased, with notable increases in utility and transportation prices.
According to 83% of respondents, food remains the biggest expense for most Nigerian households.
According to the survey, inflation has put a great deal of strain on household budgets, forcing many Nigerians into precarious financial situations where it is impossible to pay for even the most basic essentials.
The report also provides insight into Nigerians’ savings situation. About 21 percent of those surveyed said they had debt of some kind, most often from friends and relatives.
Additionally, 10% of those surveyed said they had started contributing to an emergency savings fund in the last 12 months.
Even while the total savings rate is still low and many Nigerians find it difficult to save money because of persistent financial restrictions, these saving practices show a rising awareness of the importance of being financially prepared.
