How Nigerians Earn, Spend and Save Money – Piggyvest Savings Report 2023

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How Nigerians Earn, Spend and Save Money – Piggyvest Savings Report 2023

How Nigerians Earn, Spend and Save Money - Piggyvest Savings Report 2023

It is no news that Nigeria has the largest population of Black people in the world, but how big is Nigeria as a target market for African and non-African companies in any given sector? Piggyvest Savings Report 2023 has a lot to share. 

I ponder on this market sizing a lot, because oftentimes I see pitch decks of companies that are launching or building products for the Nigerian market quote very fantastic figures (Target Market Size) which they use to project how they can become unicorns if they are able to serve only 5% of Nigeria’s population in their first 5 years. 

This is a typical revenue projection I’m talking about. Check it out.

This is a typical revenue projection I’m talking about.

Total Market Size (Nigeria’s Population) = 200 million
Total Addressable Market Size = 5% of 200 million = 10 million
Annual Revenue per User (ARPU) = $100
Projected Revenue in Year 5 = $100 * 10 million * 5 years = $5billion

Yiaaaga.. our darling startup would have reached $5billion revenue in its 5th year by making a paltry $100 from 5% of Nigerians every year. 

Mathematically, this is no genius stuff. It is just a matter of deploying the right GTM, strategic partnerships and a good amount of VC funding (say $25m) to scale the product to serve only 5% of Nigerians.

It will take a pessimistic investor with a truckload of bad belle not to issue a $25m cheque to this founder, yeah? … el-oh-el..

Now, the elephant in the room is that how many of these 200 million Nigerians can fork out $100 in a year for a product or service that does not feed, cloth or shelter them? 

Let me rephrase. Using a modest FX rate based on current realities, how many Nigerians can pay N120,000 per year for what does not directly influence their survival as humans?

How Nigerians Earn, Spend and Save Money - Piggyvest Savings Report 2023
How Nigerians Earn, Spend and Save Money (Credit: Piggyvest Savings Report 2023)

Not like I’m trying to be mean or talk down on the hard work of fellow founders. To paint a clearer picture, let’s dissect how Nigerians earn, spend and save their monies as captured by Piggyvest’ 2023 Savings Report

A little back story.. 

PiggyVest is the largest online savings and investment platform operating in Nigeria for over 7 years, with over 4 million registered users. From April 11 to May 30, 2023, Piggyvest surveyed thousands of Nigerians — of different ages, genders and income brackets — about their saving and spending habits. It also asked questions about debt, unplanned expenses and their financial plans for the future.

Insights from Piggyvest Savings Report 2023

These are some actionable insights I garnered from Piggyvest Savings Report 2023:

  1. 1 in 5 Nigerians have no sustainable income, while barely 1 in 10 earn above N1m per month.
  2. Majority of Nigerians (26%) earn below N100k monthly, while 25% earn from N101k to N249k and 15% earn from N250k to N499k.
  3. Food & Groceries (87%), Utility Bills (58%), and Transportation (48%) are the top 3 expenses that an average Nigerian spends his/her income on. 
  4. 64% of Nigerians save a fraction of their income monthly, 21% do not save at all, and 15% occasionally save. Japa is the 3rd most popular saving goal among young Nigerians.
  5. 59% of Nigerians do not keep emergency funds (recommended 6-month savings for contingencies) while 41%, who are mostly older generations, keep emergency funds aside. 
  6. Only about 1 in 25 Gen Zs and 1 in 10 Millennials have emergency funds that can last them the recommended 6 months or more.
  7. 3 in 10 Nigerians say they will turn to their friends and family or take out a loan for an unplanned ₦100k expense.
  8. Almost 4 in 10 Nigerians are in debt, 15% of which are owing ₦1 million or more; Generation X and Millennial Nigerians are most likely to be in debt.
  9. 43% of Nigerians who are owing are indebted to friends and family, 26% owe various loan apps and 24% owe banks.
  10. 58% of Nigerians plan to start a business in future, 51% will buy real estate and 41% (most of which are Gen Z) want to relocate in the next 5 years. 


How Nigerians Earn, Spend and Save Money - Piggyvest Savings Report 2023
How Nigerians Earn, Spend and Save Money (Credit: Piggyvest Savings Report 2023)

Looking at the income distribution and savings culture among Nigerians, can you see how our population size does not automatically translate to a huge target market size for SMEs and startups?

That said these are some pros and cons for you to ponder on as you develop new products, set revenue targets or sales projections:

Challenges of Companies Targeting Nigerians

With the current economic situation of the country, products or services that are not directly tied to survival of an everyday Nigerian may be a hard sell. 

Nigerians earning N250k to N500k per month are the endangered species. Companies targeting them will have to be more prudent with marketing channels and passion points they leverage to reach and engage them. 

Japa is a top priority among Gen Z and younger Nigerians; this will continue to contribute to the massive exodus of employable youths and disposable income earners. 

How Nigerians Earn, Spend and Save Money - Piggyvest Savings Report 2023

Opportunities for Companies Targeting Nigerians

Despite the escalating constraints on disposable income among Nigerians, there are still opportunities for:

  • Products that use innovative ways to encourage savings and keeping emergency funds
  • Accessible lending products with not only friendly interest rates but also help users build credit rating
  • Products that help young Nigerians (Gen Z and below) adopt financial planning, investment literacy, micro insurance, and pensions
  • Incubators and platforms that mentor, support and finance young Nigerian entrepreneurs in order to strengthen SMEs and startups across the country
  • Buy Now Pay Later solutions that help Nigerians meet their long term financial goals and spread the payment

What are your thoughts on the population size of Nigeria as a target market for launching and scaling products? Happy to learn from your experiences in selling to Nigerians across social economic sectors. 

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