NIGERIA:3.8m Lagos households earning more than $5,000 per annum

Lagos has 3.9 million households that earn more than US$5,000 or N1.83 million per annum, according to a report by the Economist Intelligence Unit (EIU). This comes to an average of N152,500 a month.

The number of household that earn above $5,000 per annum is projected to rise by 96.4 percent to 6.9 million in 2030.

The number of households earning above US$5,000 in Ibadan is put at 766,000 but this is expected to increase by 99.4 percent to 1.4 million in 2030, while Port Harcourt, which stood at 608,000 is expected jump to by 133.5 percent to 1.2 million in the same year.

Johannesburg in South Africa has 1.9 million households who earn over $5,000 and this is forecast to grow by 83.2 percent to 3.5 million in 2030.

Kenya will have 1.6 million households earning above $5,000 in 2030, up by 128.7 percent, from the number of 681,000 currently.

Meanwhile, Burkina Faso’s capital, Ouagadougou, will see this number rise by more than sevenfold to 423,000, the capital of Malawi, Lilongwe, will see a five-fold increase, to 126,000, albeit from a smaller base and by 109 percent in Abidjan (to 2.7m).

Taiwo Oyedele, head of tax and regulatory services, PWC, said Nigeria is still a low income country but there are strong fundamentals to help the country leapfrog and move to middle income level with the right leadership.

“This will increase the middle class and consequently Nigeria’s economic power, good governance and prosperity for the entire population”, Oyedele told BusinesDay by mail.

The EIU report stated that the number of Africans living in cities is set to triple by 2050, and by 2035 around half of the African population will live in urban centres. This will result in a growing urban consumer class in Africa, spurred by an increasingly younger demographic.

According to the report, Africans are turning towards e-commerce in ever-increasing numbers, owing to a variety of factors – an expanding middle-class population is one reason, while the large number of Africans moving from rural to urban areas in search of employment, resulting in rising levels of disposable income, is another. However, e-commerce is likewise successful in increasing access to shopping services in rural areas.

In Nigeria, for example, e-commerce is serving rural areas effectively, as companies such as Jumia are able to deliver to less accessible places, where sourcing goods from shops or stalls is not as straightforward. This newfound access to technology is one of the primary drivers of e-commerce growth in Africa, and will sustain growth throughout the forecast period, straddling different socio-economic segments of the population.

According to EIU, Nigeria is the most promising country in the region in terms of its business environment opportunity potential—used to describe the potential market opportunities present in a particular city, region or country. The data use external-environment indicators relating to the overall business environment, market opportunities, mobile subscriber penetration rates (per 100 people) and PC ownership (per 100 people), which provide Nigeria with a business environment opportunity score of 80.4 out of 100. This therefore places the country in pole position to take the lead in the African e-commerce market.

“The African e-commerce sector is growing strongly, largely on the back of increased smartphone take-up among African consumers, who are using mobiles to access a variety of e-commerce shopping platforms. This increasing access to technology, via avenues such as smartphones, is helping consumers in previously hard to reach areas to access all manner of e-commerce opportunities, including emerging African fashion”, says Robert Ward, Editorial Director EIU.