Photo credit: Gettyimages
I was meant to write about NNPC limited, but I got lazy and Twitter dropped something even more interesting in my laps so I’m going to take it.
The yearly “X amount is not enough” argument came in this month (earlier than normal, things must be getting bad). Usually, I keep away from these arguments because I don’t even earn up to half of what is being argued about so how would I know what is enough? I just laugh and return to my ritual of counting the hours till the next payday.
This time, however, the argument strayed into discussions about the middle class, with people claiming that the middle class in Nigeria is becoming a myth because N800,000 a month cannot afford the few luxuries possible. Ergo the middle class is disappearing.
This piqued my interest because I live in the same neighborhood with some people who let their generators run all night and send their kids to great private schools. And I can tell you for free that I do not live in a wealthy neighborhood. So what class would I say my neighbors are in?
When you google middle class, you see a lot of definitions. Reeves et al put it best when they stated that it can have various definitions ranging “from aspirations to a specific household income, and everything between”. So you can define a middle class using their cash, credentials (education and work experience), or culture.
Because this whole thing started with an argument about money, I will use cash.
“Income, Outcome, Malcolm”
Gornick and Jantti describe the middle class as households that fall in the middle of an income distribution. Plenty of approaches can be used to capture the middle class in a population, I’ll show you some of the main ones I found here:
Distance from the median: This looks at 75% to 125% of the median income. In the Nigerian context, PiggyVest released a report on the income of people who use its product. They were grouped into six earning bands: Nothing, below N100,000, N100,000 to N249,000, N250,000 to N499,000, N500,000 to N999,000, and above N1 million. A surface median calculation of the lower bands in these groups will give you roughly N300,000. Therefore to be middle class here, you should be earning between N225,000 and N375,000. Using upper bands, the median is around N374,000. This means you’ll need to earn between N280,000 and N467,500 to be middle class. Looks tough, but I bet everyone reading this knows someone earning in this range. So, a middle class exists!
Range of distribution: using the 2nd to 4th quintile: Using the same data set as above means that people earning from N129,800 to N499,400 are well within their rights of referring to themselves as middle class.
Distance from the poverty line: This usually looks at things from the view of the federal poverty line. To be middle class, you should earn around 150% of the poverty line. For Nigeria, I will be using the global policy line which is $2.15 (around N3,440) daily per person because I can’t find the updated National poverty line and I think the old one is not reflective of the reality today. Using that rate, to be living at the poverty line, you will be spending around N103,200. And to be in the middle class, you only need to spend N154,800 on yourself monthly. Don’t worry, I agree with you, I don’t want my boss to think I’m collecting middle-class money. Of course in a family of four, this number would have to be multiplied by four to verify whether the family is middle-class or poor. (Please employer, I know I wrote single on my employment form, but I am chyking many women and I need to also contribute to their N3,440 daily expense. Thanks and God bless).
Finally, we have absolute purchasing power: Using this as a measure, economists say that middle-class households have incomes between $10 to $100 per person per day. The number is smaller for developing countries (like Nigeria) at $2 to $10 per person daily. This is somewhere around N3,200 to N16,000 daily. Per month we’re looking at between N96,000 to N480,000.
Note how even in the first two (more localized) definitions and the last two (global-focused) definitions, The range is very close to being the same. Another thing to note is that there is a Nigerian middle class. And the middle class is quite large if we’re being honest.
The Lifestyle Cost
Our Aspirations can also be an indicator. One of the biggest questions was “How are you middle class if you cannot even travel to Ghana”. Again, I wasn’t harmed by that question because I am among the poor. But I was curious as to why this was declared a “middle-class” thing. Travel used to be a thing back in the day (I remember when some guys in my secondary school were to travel to the UK on an excursion). But there has been a global drop in this. In fact, in the US, the capital of capitalism, many people believe that travel is an upper-class privilege.
One of my father’s greatest testimonies is that my sister and I had graduated before school became expensive. And every once in a while, I shudder at the thought of the shege I will see when it’s my turn to pay school fees. That’s not even counting the cost of Cerelac and Pampers. As Bob Marley said, “The cost of living get so high, the rich and poor start to cry”.
And it is this crazy cost of living that is making us feel like the middle class is eroding. Because “Popsi didn’t look like he wanted to weep after buying just one roll-on back in the day now.” (I’m not going to talk about mothers because mine haggled over the price of everything back in the day. I used to pray silently that we don’t get whooped when I followed her to the market). What can we do?
Since after watching Cocaine Bear, I have grown a strong affinity for the animals. One of the funniest capabilities of a bear is its hibernation mode. During the winter, it goes into a den, sleeps most of the time, hardly drinks water or eats food, and leaves the den only once in a while. Come Spring, and it is out looking for new prey to devour like the boss that it is. The ability to adapt to situations is one of our biggest pluses in the human race, it is what has kept us alive to date. We might need to buy less, prioritize a bit, and save aggressively. Be the bear!
Another thing that works very well is a multiple-income household. A proper game-changer! Get married folks, both of you can pay the school fees and have enough for dinner later.
Finally, and this is the most important one of them all. There is a need for a credit culture in Nigeria. We need to be able to spend our money in advance! BNPL, TNPL (travel now pay later), MNPL (marry now pay later). Imagine how great life would be if you didn’t have to immediately pay the complete price of your television. You’d be saving some much-needed cash for a great time at Cubana (or doing something more boring like paying rent).
I think I should state here that I work with a company that is working to make this happen, so I’m pretty passionate about it, and I know it will happen because of the quality of the people I work with.
Are we living in a poor country, well I prefer to call it a “developing country” but you can say that. But is everyone here either the poorest of the poor or the richest of the rich? No. I think we have some guys in the middle, I think we need to recognize this, so we can work towards building experiences and products that would fit their profile.
What Have I been up to:
Speaking of salaries, my employer just turned 5! I feel like a proud nanny.
“I have been extremely busy this year” is the excuse I’m using for not putting out anything lately. Mea Culpa
Speaking of Mea Culpa, please do not watch that movie. I feel like I did it so you don’t have to. It’s not worth it at all.
I should probably check out Dune 2. I know a few people who skipped church during service to watch the movie. Apparently, it’s that good.
I’m dedicating this one to my pops because I now understand why my breaking things around the house used to vex him. Plus he did such a great job shielding us from the economic realities surrounding us that I was sincerely shocked the first time I used my money to buy stuff.
Thanks for reading this far. And for even reading at all, have a great week ahead.
Such a great read juice!