Nigeria’s middle class is well educated, optimistic about the country’s future, earns between N75,000 and N100,000 monthly and now accounts for up to 23 per cent of the national population, according to a ground-breaking study by Renaissance Capital.
A report of the study which relied on data by the African Development Bank, put the average income per annum of this group at between N1m – N1.2m ($6,000 - $7,000).
The report released yesterday, says that of the sample in study, over 90 per cent have at least a university education, over half work in the public sector and 68 per cent live in rented or leased accommodation. The average household size is 3.7 people, while the average number of cars is 0.8 and only five per cent of Nigeria ’s middle class has two cars or more.
The growth in the middle class size in Nigeria , follows the pattern in the rise of the country’s National income. For instance, Nigeria ‘s Gross Domestic Product (GDP) increased five fold from $46 billion in 2000, to $247 billion in 2011, while GDP per capital has increased to about $1,600.
Similarly, the country’s population has increased by about 33 percent during the same period, rising from 119 million to the current estimated 160 million.
Analysts say the huge opportunities presented by the expansion in the size of the country’s middle class help to showcase Nigeria ’s attractiveness as a preferred investment destination with significant upside.
The opportunities also present their own set of challenges and responsibilities for both macro-economic and micro-economic policies and responses.
While 48 per cent of those sampled have Internet access, only 2 per cent shop online, reflecting growth opportunities in the area.
The aspect of the study showing that 73 per cent of the sample population do their shopping at open air markets also present opportunities for organised and scaling up of formal markets and malls in Nigeria.
“Even more critically, and perhaps presenting the highest growth opportunity is the low level of debt by the middle class”, said one analyst who has seen the report.
Most of those sampled do not have mortgages or credit cards, reflecting the underdevelopment of the consumer lending sector.
The economy has grown by about eight per cent on average in the last few years, as reflected in the expanding GDP. This growth has been motivated by increases in oil prices and thus government revenue.
It also reflects significant growths in telecoms and retail, but also some measure if incremental growth in agriculture. Indeed, the report contained 68 per cent of those in government. So, as income has increased, so is the standard of living and prosperity of the middle class.
The report believes that with increasing investment in electricity generation and transmission, Nigeria can double its GDP from the current $227 bn to $460 bn by 2016, provided the current oil price trajectory is sustained.
