The report also revealed that the number of Nigerians earning more than N500,000 per month has dropped by 57 per cent over the last one year.
Blaming the current economic challenges for the drop, the report also noted that the people are now more concerned about meeting their every day needs, particularly food, than saving.
Earlier this year, the Central Bank of Nigeria (CBN) in its Household Expectation Survey, reported that households are spending the largest chunk of their income on food adding that the trend could last till the end of this year and possibly extend to next year if inflation should persist.
According to the CBN in the report, Nigerians are spend 54.9 per cent of their income on food and other household items, 35.4 per cent on education, 30.2 per cent on transportation, 20.0 per cent on electricity, and 12.2 per cent, on medical expenses, while making no provision for savings or investment.
The 2024 PiggyVest Savings report corroborated this pattern of spending by Nigerians.
Accoding to the report, “Food and groceries account for the biggest personal expenses, followed by transport, bills, and utilities.”
Nigeria has been struggling with high food inflation which has been rising over the last year and now stands at 37.7 per cent.
The report also show a decline in savings as only 57 per cent of Nigerians are saving for the proverbial rainy day compared to 64 per cent in 2023. The decline the report said, can be attributed to higher costs of living, which would naturally make individuals save less.
The report says building emergency funds, starting or growing a business, and upkeep for children are the top three savings goals in 2024.
It further shows that in 2023, 14 per cent of respondents disclosed earnings above ₦500,000, but this dropped to just six per cent in 2024.
“This decline may reflect the relocation of high earners — identified as a top savings goal in the 2023 report — or job losses, as the number of respondents earning below ₦100,000 or reporting no income also increased,” the report said.
The report noted that women are more likely to earn lower wages, with 59 per cent of women earning below ₦250,000 compared to 49 per cent of men.
Highlights from the report shows that only 10 per cent of Nigerians are saving for emigration, 33 per cent reported having no emergency savings between 2023 and 2024, a situation 72 per cent of the respondents blamed on inflation while 32 per cent attributed it to changes in income or economic status.
The report also shows that many Nigerians are still finding it difficult to access funds either for business or for personal use as 45 per cent of respondents report borrowing from friends and family while those who borrowed from banks and loan apps constitute 19 per cent and 15 per cent, respectively.
However, 79 per cent of Nigerians report not being in debt, likely reflecting the average Nigerian’s aversion to credit.
Some economists had warned that the spending pattern adopted by households which relegates savings and investment to the background could lead to widespread poverty in the country.
They said failure to save could expose the people to economic shocks that could worsen the poverty situation in the country.
They said while government should step up its fight against inflation and to bring down prices of essential goods, families should begin to develop a detailed budget to track income and expenses and identify areas where spending can be reduced.