Where is Nigeria’s Thriving Middle-Class in 2021? The Youth Want to Know.
A truism of economies is they thrive when they have a large stable middle-class. In the mid-2010s, one of the most aggressive facts promoted about the Nigerian economy was that it had created a large and thriving middle-class. Many observers were skeptical but were called naysayers.
Today, we are all concerned about the future of our economies, which has become incalculable because of the uncertain impacts of COVID-19; rising inequality, growing poverty, upward concentration of wealth, and climate change. Nigeria is facing such concerns and has a serious youth immiseration and deprivation problem. The culture of youth neglect has never been so insensitive. And yes, the middle class and the less well-off are the hardest hit. Upward mobility for the youth has become a phantom.The global mainstream and local media were keen in 2019 to tell the world 4.1 million Nigerian households, 2 to 6 percent of the population, were earning middle-class incomes because they go to the shopping malls and spend. Spending, not income was the driver of the boom. In 2020, an ominous year, those shopping malls were fleeing the country due to dwindling sales.
Hence, Nigeria spends at least 50 percent of GDP on servicing loans; the economy is struggling. The fastest-growing economic index for a nation is debt-interest payments.
Notwithstanding, the bigger question is, how do the middle-classes in Nigeria earn their incomes? There are no realistic representations of middle-class earnings in Nigeria. Such data are extrapolations from dollar evaluations of what they need to be in a global economy. Meanwhile, the government is struggling to adopt a minimum monthly salary of N30,000 (£50) for workers and the cost of living is prohibitive.
Nevertheless, the bulk of income spent by the middle-classes in Nigeria does not come from legitimate or taxable sources; selling one’s labour to an employer for a wage, earning a profit from enterprises; and drawing rent from leasable assets owned. Such observations give us strong indications that the Nigerian middle-class earners make extra money, if not most of their income, from hidden legitimate sources or hidden illicit ones.
There are seven identifiable sources of income that finance middle-class spending and lifestyles listed in decreasing order of incidence;
1. Bribery from clients.
2. Money transfers from friends and relatives overseas.
3. Enterprise and business.
4. Multinational private sector pay.
5. Financial crimes, domestic and international, other crimes, and immoral earnings.
6. Inheritance and family affluence.
7. Presumed spiritual practices.
We will concern ourselves here with only the first two factors and mention the second two because they are far more widespread than the rest.
Two of the most popular and valid contemporary quotes in Nigeria are “One cannot rely on their salary alone” and “It is where you work, you chop.” Several senior civil servants earn less than £300 [equivalent] a month, but they have good cars, live in good houses, buy similar things to their counterparts in OECD nations, own the property they live in, send their kids to the best schools, and some even overseas.
Civil servants (career and political) are notorious in the country for being corrupt and their incomes are “padded”. A middle-class financed by corruption grows, the nation dies.
The multinational oil sector in Nigeria pays its workers proper global middle-class incomes like some few other international industries in the real economy. These incomes may seem satisfactory, but employees complain they are inadequate. Most local successful entrepreneurs serve those same industries.
Moreover, in a country of over 200 million people, less than half a million employees, contractors or consultants work in the named spheres, and many are not middle-class. Import traders are the exception they often operate independently of government and large corporations. Nevertheless, they are notorious for allegations of importing shoddy goods sold at premium prices. The rest of the private sector resembles the civil service.
Nigerian residents receive traceable remittances of $25 billion annually from citizens and others overseas. Non-traceable transfers are large and yet difficult to estimate. The traceable figure is equivalent to over 6 percent of GDP and possibly larger. Such information does not account for the basic and luxury goods shipped to Nigerians from overseas.
The remittances from overseas finance many things; overseas travel, school fees, medical bills, rent, daily sustenance, debts, repairs. And essential goods, luxury goods, ceremonial activities, real estate acquisitions, and swell accounts. Such remittance-fuelled expenditures count as vibrant middle-class activity.
Money made from corruption benefits the corrupt, but it under-develops if not decivilises the economy; it has been that way for decades. But the corrupt become the visible exponents of the middle-class.
Furthermore, the dependence of a significant section of the ‘spending’ middle-class on remittances from overseas shows the existence of a weak or co-dependent middle-class. The government may tax individuals for building a house, importing goods, or running a bank account. Still, it cannot get much tax out of the tiny middle-class income otherwise.
The bloc called the Nigerian middle-class excludes the participation of all but a derisory percentage of the youth population, which stands at over 70 percent, 140 million under-30s. In addition, this constituency undertook most of the social tensions in Nigeria on behalf of wealthy patrons, be it protests, insurgencies, terrorism, or political thuggery. It is an exploitation of their lack of hope and opportunities. What a future for a generation!
We remember when being a doctor, lawyer, engineer, accountant, biochemist, or artist was possible for most and guaranteed a middle-class lifestyle.
The Nigerian singer, Sound Sultan, made these lyrics famous;
Na Wetin you see with your eyes, You go be, No matter how you visualise am.
It was a poignant reminder that social mobility was a near impossibility for the Nigerian youths back in 2002. Things are worse now. Despair abounds. Alas, seekers of hope may have to find it somewhere beyond the nation’s borders. The struggle continues.
Perhaps, a new government in 2023 will seriously think and act to create a strong middle-class, one that will embrace its young population rather than tell them to wait their turn or go overseas and remit money home.
Please take a look at me article, The New Economy If You Are Not Rich. Cheers