Nigeria's growing middle class

A new detailed survey and report on Nigeria’s expanding middle class, issued by the leading emerging markets investment bank, Renaissance Capital, has portrayed Nigeria as a nation that is optimistic about economic growth, values entrepreneurship and is positioned to capitalise on a boom in consumption.

The survey, released in Lagos, also noted that Nigeria’s per capita gross domestic product (GDP) at market exchange rates has already increased from $390 in 2001 to $1,541 in 2011 based on the International Monetary Fund (IMF) figures, and would reach nearly $2,000 by 2016 “if the pessimistic IMF forecasts are accurate, or $2,500 in our more benign scenario”.

The survey and accompanying report, authored by Renaissance Capital’s Global Chief Economist, Charles Robertson; Head of Sub-Saharan Research, Nothando Ndebele; and Sub-Saharan Economist, Yvonne Mhango, drew attention to the wealth of opportunities presented by one of the world’s fastest-growing economies, as an expanding middle class fuels GDP growth in Africa’s most populous country.

The report drew out the investment opportunities and implications presented by Nigeria’s rapidly growing middle class, against a highly favourable macroeconomic backdrop.

It noted that GDP rose five fold from $46 billion in 2000 to $247 billion in 2011, according to IMF estimates, while the population increased by more than one-third over the same period, from 119 million to 160 million.

Nigeria’s middle class accounts for about 23 per cent of its population, according to African Development Bank data.

Renaissance economists added that, “The magnitude of the increase in Nigeria’s population between now and 2016 is the equivalent of adding another Romania; while, based on cautious IMF forecasts, the increase in Nigeria’s GDP in five years will be equivalent to the addition of another Vietnam or Bangladesh.”

The Renaissance Capital survey was conducted with 1,004 middle-class Nigerians, residing in the cities of Lagos, Abuja and Port Harcourt, 70 per cent of whom were aged 40 or younger.

“The Nigerian middle class we surveyed has a monthly income of some $500-600 and nearly half will be buying fridges, freezers and other white goods, suggesting a consumer boom is under way,” said Charles Robertson. “We cite the upside for consumer lending retail, white-goods retail, lifestyle and leisure, housing development and home improvement.”

The survey made various findings on Nigeria’s middle class. Among them were the following: Average monthly income is in the range of N75,000 - 100,000 ($480-645, or roughly $6,000-7,000 pa).

It also found that the middle class are well educated: 92 per cent have obtained post-secondary education or have studied at an institution of higher learning. Educating their children well is a top priority, and over half send their children abroad to complete their education.

“A sizeable 76 per cent of Renaissance’s sample works in the public sector; of those working in the private sector, 38 per cent run their own businesses. Most of them live in leased/rented accommodation (68 per cent) with an average household size of 3.7 people. The average number of children in each household is 1.6 (excluding those away at school) vs a national average that is closer to 3; larger families are more common in rural areas,” the survey revealed.

According to the Rencap survey, nearly half of the middle class have no immediate plan to move house, 18 per cent are planning to move to a newly completed self-owned apartment, and eight per cent are planning to move to another rented apartment.

“The average number of cars per middle-class household is 0.8 (around one third of middle-class Nigerians have a car that is less than five years old); 5 per cent of homes have two cars. Car ownership remains well below levels seen in Zimbabwe, among others.

“The Nigerian middle class has a culture of saving: they care little about the deposit rate and do not expect to borrow from a bank. If they had the funds, they would rather invest in land/property than shares or bonds.

Most do not have mortgages (which represent approximately 1 per cent of GDP) or credit cards, although many expect to apply for the latter.

As in many emerging markets, the consumer lending sector is woefully underdeveloped,” it stated.

Their principal sources of information, the survey noted, are TV and radio. “Forty-eight per cent have internet access, but only 2 per cent shop online at least once a month. There is huge scope for internet shopping, if logistics allow. The majority shop at open-air markets (73 per cent), as well as use convenience stores (62 per cent). Twenty per cent dine out at least once a week,” it added.

From the detailed findings, only 15 per cent of this class have travelled abroad; 35 per cent of households have at least one person with an international passport, while the United Kingdom is the most favoured travel destination.

“Their key areas of concern over the next 12 months are the supply of electricity and unemployment, with between 19-23 per cent citing these as concerns; while crime (5 per cent) and corruption (3.5 per cent) are seen as far less concerning. Three-quarters are optimistic about the future of Nigeria,” the survey added.

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Suspected Pro-Gaddafi mercenaries arrive Kaduna, Nigeria

Over 100 people, suspected to be mercenaries that fought for the sacked Libyan Leader, Muammar Gaddafi, have arrived Kaduna through the Nigeria - Niger Republic border at the weekend.

They were said to have been conveyed in two luxury bus owned by transport companies located in the South-eastern Nigeria.

There weren't any official comments from the Kaduna Zonal Comptroller of Immigration, Suleiman Umar, as he kept reporters waiting for hours without attending to them.

However, a source in his office explained that the command had to obtain clearance from Abuja and liaise with other relevant security agencies, like the State Security Service (SSS), Police and Army before speaking to the press.

"We are yet to ascertain whether they are Gaddafi's fighters but we know they are Nigerians from Libya. They came in through Niger-Nigeria border. As I am talking with you now, another set are at the Kaduna toll gate coming.

"What we want to do now is to keep them in our custody and await directives from government on the way forward. We don't have money; certainly, the state will cater for them until further directives.

"Right now, high level security meeting is going on at the government house and our zonal comptroller has gone there."

One of the victims, who pleaded anonymity, claimed they were wandering in the desert for the past three weeks before they were apprehended by Immigration officials at the Niger-Nigerian border.

"We left Libya about two weeks ago wandering in the desert before our arrest and subsequent conveyance here (Kaduna) from the Niger-Nigeria border," he said.

They have however been taken to Abuja.

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Shell shuts in 25,000 bpd of oil due to sabotage and theft

Anglo-Dutch oil group Shell said Monday it has shut in 25,000 barrels per day of crude in a southern Nigerian oil field due to spills caused by sabotage and theft.

"The Shell Petroleum Development Company of Nigeria Ltd (SPDC) has shut in production from Imo River Field due to a recent upsurge of illegal bunkering and refining activities which have impacted the environment," the company said in a statement.

"Some 25,000 barrels of oil per day is affected," Shell said, adding it took the action on August 28 "to starve the illegal bunkerers of crude oil in order to prevent further environmental pollution."

Theft of crude is commonly referred to as "bunkering" in Nigeria.

Shell said the field which straddles oil-producing Abia and Rivers states, has five flow stations, a gas compressor station and several kilometres of pipelines among other faculties.

The thefts were first noticed in the field two years ago, prompting government security forces to move in to dislodge the perpetrators and destroyed their barges and canoes.

The military deployed in the oil delta has in recent months reported busting hundreds of illegal refineries.

"But the criminal act has now resumed, with crude thieves inflicting hacksaw cuts on pipelines to siphon crude to waiting barges and canoes, some of which can hold as much as 40,000 barrels," it added.

Pipeline vandalism and associated spills are common in the Niger Delta, Nigeria's oil and gas producing region, to feed a lucrative black market.

Shell, one of Nigeria's major oil operators, has seen frequent shut-ins in recent years.

Last month, it was forced to shut down its Utorogu gas plant following a leak on its trunkline in western Niger Delta.

Activists say oil firms such as Shell have not done enough to prevent such incidents.

A UN report in August said decades of oil pollution in the Ogoniland area of the Niger Delta, located in Rivers state, may require the world's largest ever cleanup.

Nigeria is Africa's largest oil producer, accounting for 2.3 million barrels of crude per day according to the latest report of the International Energy Agency.

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Foreign Minister says no no Gaddafi men in Nigeria

There is no confirmation that some Muammar Gaddafi loyalists have entered Nigeria from neighbouring countries such as Niger,  Foreign Minister Olugbenga Ashiru has said.

Ashiru told Nigeria reporters covering the 66th UN General Assembly in New York that speculations that Gaddafi’s men had entered some states in Nigeria were untrue.

“Our security agencies are on the alert and I can assure you that anybody who enters Nigeria will be promptly deported from wherever he or she came from,’’ the minister assured.

The minister also said he did not believe Gaddafi or any of his associates would seek asylum in Nigeria.

“I don’t believe that will happen, maybe they will prefer not to come to Nigeria for obvious reasons and I don’t think anyone should express that kind of anxiety,’’  the minister said

Niger, which borders Nigeria in the north, confirmed the presence of some senior Gaddafi officials and at least one member of his family in the country.

Nigerien authorities also confirmed that they were keeping one of Gaddafi’s sons,Saadi, under surveillance along with several others who fled to the country, including Gen. Ali Kana, who commanded Gaddafi’s southern troops.

Interpol has issued arrest warrants for Gaddafi, his son Saif al-Islam, and intelligence chief Abdullah al-Senussi, all wanted by the International Criminal Court for suspected crimes against humanity.

About  200 Nigerians still in Libya

Ashiru also told reporters in New York on Saturday that in spite of   the “massive evacuations’’ authorised by the Federal  Government in February and March, some Nigerians still chose  to remain in Libya.

The minister quoted said that  “the last plane that left Libya was virtually empty.”

In March, the National Emergency Management Agency revealed that 4,000 Nigerians were evacuated from Libya.

The minister, however, said he was in touch with some Nigerians still in Libya and had received information that none of them had been killed .

He said the government had contacted Libya’s Transitional National Council (TNC) authorities on the need to ensure the safety of her nationals that were still in the country.

The minister said the TNC had assured him of their safety, adding that his interaction with them confirmed that “they are fine.’’

“There was particular guy (Nigerian) in Libya who sent an SMS to Nigeria which was also forwarded to me.

“I have been in touch with him several times and each time I call him I will ask him how Nigerians there (in Libya) are doing and he will assure me that they are fine.

“I have also asked to know the problem of some those who were arrested and later released, but no one was killed.

He said the Nigerian government was still assessing the security situation in the North African country.

“We will continue to assess the situation and we want to make sure that everything is stable and secure.

“At the appropriate time when we think the situation has stabilised we will take a decision,’’ he added. (NAN)

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