By Yinka Kolawole
A study by Standard Chartered Bank has revealed that more emerging affluent consumers in Nigeria plan to start a business to increase their wealth than in any other market across Africa, Middle East and Asia.
The Emerging Affluent Study 2018 titled, Climbing the Prosperity Ladder, carried out by the bank, examines the views of 11,000 emerging affluent consumers – individuals who are earning enough to save and invest – from 11 markets across Africa, Middle East and Asia.
The study revealed that in Nigeria 41% of emerging affluent consumers say that starting their own business is a strategy to meet their financial goals and increase their wealth; this compares to an average figure of just 27%. It is the second most popular strategy to increase wealth among the emerging affluent in Nigeria behind investing in financial products (55%); and ahead of career progression and salary increase, which sits in third place (33%).
According to the study, the number one financial goal for Nigeria’s emerging affluent is saving towards their children’s education, with 14% stating this; it is also the top savings priority across the markets in the study (16%). For more than one in 10 (11%) setting up a business is the top savings goal; this is higher than any other market – the average figure is just 7%.
The study stated: “When it comes to meeting their financial goals, more than half (54%) of the emerging affluent in Nigeria say they invest with a target and a strategy to achieve it. Despite this, when describing the financial products they use to meet their goals the most basic savings approaches came out on top: 59% use savings accounts. By comparison, less than one-fifth use fixed income investments (19%), equity investments (13%) and mutual funds (12%); however, a quarter use property investment making this the second most popular method for this market.
“This could explain why currently more than half (54%) of Nigeria’s emerging affluent feel far away from achieving their top financial goal. The emerging affluent in Nigeria recognise that a lack of financial understanding may be stopping them from meeting their financial goals: more than a third (35%) say they feel held back in their aspirations by their lack of financial knowledge; and 58% believe financial education would help them reach their financial goals faster.
“The study also reveals that more than two-thirds (70%) of Nigeria’s emerging affluent believe effective wealth management holds the key to greater social mobility, so addressing the financial knowledge gap could play a crucial role in helping them to keep moving up the ladder.”