Efosa Ojomo’s view
Over the last few months, my team and I have been working on a project to better understand the scale of “non-consumption” in Nigeria’s economy, a term that describes a person’s inability to purchase a product or service they need. What we’ve uncovered is what I call a predictable surprise: Nigeria’s level of non-consumption fits this paradox perfectly, it is both staggering and entirely foreseeable. We knew it would be large, but the extent of it is far greater — and more urgent — than many might imagine.
Consumption matters because, on a fundamental level, life is a series of struggles marked by consumption or non-consumption. We get hungry (struggle). We eat (consumption). We need to go to work or visit a friend (struggle). We drive or get in a vehicle (consumption). We need to feel healthy when we get sick (struggle). We find and take medicine (consumption). Simply put, when people aren’t consuming, they’re struggling. And most Nigerians aren’t consuming.
First, more than 130 million of the nation’s 220 million-strong population are living in “multidimensional poverty,” a method of measuring poverty that goes beyond considering a person’s income level and includes health, education, and access to other vital resources such as electricity, clean water, and sanitation. It means that nearly two thirds of the country wakes up each day struggling to meet basic needs: The average Nigerian household spends more than 50% of its income on food, more than 18 million children are out of school (one in three), and approximately 25 million people are at risk of food insecurity.
Second, Nigeria’s economy is structurally unproductive. Economies in sub-Saharan Africa are approximately 8% as productive as those in high-income economies, according to a World Bank study on global productivity. In Nigeria, where there are approximately 40 million micro, small, and medium enterprises they are just 12% as productive as those in larger economies.
Here’s how this lack of productivity shows up in the economy: In financial services, there’s roughly $281 per capita of domestic credit flowing through the economy. In South Africa, there’s $5,450; In the United States, there’s more than $159,000. Fewer than 10% of workers are part of the formal economy, meaning that more than 90% of people have no insurance, no sick days, no vacations, or guaranteed income. The Nigerian economy is so structurally and fundamentally unproductive that fixing it would require an intentional, long-term effort to build inclusive, productivity-enhancing systems.
Also consider mobility. Although data for Nigeria’s per capita miles traveled in a vehicle (VMT) is difficult to find, estimates suggest it’s less than 500. In South Africa, VMT per capita is estimated to be around 2,580; In the United States, VMT per capita is around 10,000. Nigerians are not moving.
Electricity is another area of significant non-consumption. Nigeria’s grid capacity is roughly 5 GW, although estimates suggest the country generates an additional 40 GW from millions of off-grid generators. Even at that level, Nigeria’s per capita electricity consumption is approximately 1,700 kWh versus the global average of roughly 3,700 kWh per capita.
Within this crisis of non-consumption however, lies a profound opportunity. At this scale, non-consumption is not just a sign of what’s missing — it is a glaring signal for what’s possible. It reveals that there are great unmet needs in virtually every corner of the Nigerian economy. If leaders — public and private — can shift their focus from serving the few who already consume to enabling the many who currently cannot, they won’t just be solving poverty. They’ll be unlocking a new wave of inclusive prosperity, driven by markets that are designed to empower, not exclude. The predictable surprise of Nigeria’s non-consumption is all the more reason to build.
*A longer version of this piece was first published on the Christensen Institute blog.
Efosa Ojomo is the director of the global prosperity research group at the Christensen Institute think tank, and co-author of ‘The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty.’