5 Economic signs Nigeria’s middle class is shrinking

Rising costs for essentials such as housing, healthcare and education force many families to dip into savings or revert to lower income brackets. Layoffs in office jobs and stagnant real wages leave few households with disposable income for non essential needs.

These trends reshape consumer habits, weaken domestic demand and threaten future growth.

Below are 5 clear indicators showing how this once expanding group is contracting under today’s financial strains.

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Where middle income families once aspired to own property many now rent or share homes with relatives. Mortgage applications have fallen by nearly twenty percent year on year as higher interest rates and tougher lending rules put ownership beyond reach.

Employers may grant nominal salary increases to match inflation but after accounting for price increases real earnings have fallen by about ten percent over the past two years. This gap leaves few households able to cover even basic non-essential costs.

Enrollment in private schools, long a hallmark of middle-class investment, has plateaued or declined in several regions. Surveys show up to twenty five percent of families moving children into public schools or home schooling to save on fees reflecting tighter budgets.

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Spending on restaurants, cinemas and domestic tourism has contracted sharply. Transaction data indicate a thirty five percent reduction in leisure related purchases among middle income credit card users as families prioritize food, utilities and medical expenses.

With formal sector wages stagnating about half of middle income professionals now run small side businesses or gig work such as ride hailing online retail or freelancing to make ends meet. This shift signals that full salary no longer covers routine household needs.

Together, these economic signals underscore a worrying reversal for Nigeria’s middle class. Policymakers and businesses must address inflation, support wage growth and expand affordable credit if they hope to preserve this vital segment and sustain future economic resilience.

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