• Monday, December 11, 2023
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50% of Nigerians saw a rise in income in four years – Survey

50% of Nigerians saw a rise in income in four years – Survey

Five in 10 Nigerians experienced an increase in their income in the last four years, according to a new report by SBM Intelligence, an Africa-focused geopolitical research and strategic communications consulting firm.

The report, titled ‘Living Dangerously on Credit’, said the 50 percent of Nigerians who had an increased income is more than double the 18.6 percent who reported an income decline.

More than a quarter (27.4 percent) of the respondents said their income has remained unchanged since 2019.

“Respondents who reported increased income attributed it to promotions, changing jobs and increased demand for their goods. In contrast, job losses, salary cuts and reduced sales were cited as reasons for experiencing a reduced income,” the report said.

It said the Nigerian consumer is currently facing significant challenges because of a combination of high inflation, sluggish economic growth and high unemployment rates.

“This situation has resulted in wage increases that are not keeping pace with rising inflation. This has left Nigerians with little choice but to gorge on credit facilities,” it added.

SBM surveyed 1,745 respondents living in Lagos, Kano, Abuja, Port Harcourt, Awka, Ibadan, Onitsha, Enugu, Bauchi, Nnewi and Calabar, a representation of Nigeria’s six geopolitical zones.

The firm asked questions on whether or not their income has increased, changes they have made to their spending habits and lifestyle and also their debt status since 2019.

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“The data contained in this report is only up-to-date as of September 15, 2023. Some of it is subject to change during the natural course of events,” it said.

BusinessDay reported in September that banks’ salaries of their staff rose by 26 percent in one year. According to eight banks’ financial statements, their personal expenses grew to N277.2 billion in the first half of 2023 from N219.8 billion in the same period last year.

More respondents from the Northcentral region—representing 28 percent – reported an increase in income compared to those based in other parts of the country. The Southwest followed, with 24 percent of respondents reporting an income increase, authors of the SBM report said.

“Income remained stagnant in Southwest, accounting for 30 percent of the respondents who said their income did not change in the four years between 2019 and 2023,” they said.

They added that respondents from the Southeast reported the biggest decline in income, accounting for 28 percent of all those who said their income had decreased.

“This was followed closely by the South-South region, where 23.6 percent of the respondents reported decreased income.”

The report also revealed that Nigerians reported spending 97 percent of their monthly income on food as the monthly average spending on food was N105,318 compared to the monthly average income of N108,097.

“Respondents from the Northeast, South-South and Northwest reported spending above 100 percent of their income on food. Those in the Southeast got a little respite, spending 80 percent of their income on food.

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“Those in the Southwest and Northcentral reported spending 97 percent and 89 percent of their income on food, respectively,” it added.

The Federal Government reforms, such as the removal of petrol subsidy and naira devaluation, implemented in the second quarter of the year, surged the cost of living of cash-strapped consumers.

According to the National Bureau of Statistics, the country’s inflation rate, a measure of the general price level, rose to an 18-year high of 26.72 percent in September from 25.80 percent in the previous month.

Food inflation, which constitutes 50 percent of the inflation rate, rose to 30.64 percent in September, from 29.34 percent in August.

The World Bank said in June that inflation pushed an estimated four million more Nigerians into poverty in the first five months of this year.

The removal of the fuel subsidy tripled the petrol price to N617 from N184, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares. This situation affected those who rely on public transportation, particularly workers in the private sector.

With higher transportation fares, many employees are forced to allocate a substantial portion of their salaries to cover commuting expenses, leaving little for other essential needs like food and rent.

“Removing subsidies has led to an increase in the prices of goods and services such as fuel and food. This has made it difficult for people to afford necessities such as food and transportation,” analysts at SBM said.

They added that the economic change has also affected people’s ability to earn a living wage. “Many people have lost their jobs or experienced decreased income due to the economic downturn.”

The report also highlighted that the main reason why most respondents (47.8 percent) were unable to afford some items between 2019 and 2023 was the increase in the prices of goods.

“This can be attributed to the high level of inflation in the economy, which eroded the purchasing power of consumers. Various factors, such as supply shocks, demand shocks, currency depreciation, or expansionary monetary or fiscal policies, can cause inflation.”