When I started working as a new hire, one of the things shoved down my long throat was my salary account, which was a current account. I didn’t know my left from my right as the account was free to use so all the complaints of charges that customers were screaming about were like cold water pouring off the back of a randy drake.
I wasn’t alone; as having a current account is a right of passage for anyone starting work at structured (more formal) organizations. You go through finding references, and they dashed you a chequebook, with which you can always make withdrawals of the pittance you are paid.
But as banking evolved in Nigeria and everyone got on the electronic channels, things changed dramatically to a point where it is now gross foolishness to keep your current account.
Going back to what bank account products were meant to be, current accounts, called checking account in the US, are designed to be used for everyday transactions, allow you to give cheques to friends, billers, and loan sharks, to draw money from your accounts, etc. Because of this, the stringent requirements needed to have a current account include getting two other current account holders to provide references for you; a letter from your employer to show that you earn something, no matter how little. For these services, Nigerian banks charge a commission on turnover (N5 per N1,000), which recently transformed itself into an account maintenance charge (N1 per N1,000). Outside Nigeria, banks charge a flat monthly fee to run your current account which could be waived if you maintain a minimum amount.
Savings accounts, on the other hand, were designed for savings. You need minimal documentation for this (identification), and you earn interests on whatever amount you leave hanging around each month. However, if you withdraw from it too often, you don’t get to receive any interest.
Nigerian banks being alaseju, are very good at collecting their charges. In fairness to banks, these charges are fair, but because banks do a poor job of communicating with customers, the charges look spurious and annoying. Throw in the trouble of getting two random uncles to be your reference, inability to put together all the documents the banks want, and the annoyance of seeing your money disappear month after month, Nigerians made a nice detour from current accounts. The numbers speak loudly: of the 111M accounts, 24M are current while 83M are savings account.
The savings account has been so bastardized but is now serendipitously solving the problems of everyday Nigeria. You don’t need to wonder while wandering to know that current accounts’ usefulness has gone with the winds. A regular savings account come with a card for ATM, POS, and web transactions. Savings accounts are also strapped with mobile, internet, and USSD banking, you can do interbank transfers, pay your bills, and buy airtime.
So, what do you lose? You can’t give cheques, but nobody gives two flying horse legs about cheques anymore. In fact, the CBN itself has waged war against cheques up to a level that its use is restricted to those with antediluvian attitude and my friends who borrow money from consumer credit companies (you know yourselves!). You also can’t walk into LG and Samsung to take on new TVs hoping to pay small small. For that inconvenience, you are free from many charges including but not limited to a 0.1% account maintenance fee, search fee, stamp duty fee of N50 for every deposit over N1,000.
So for all these pain of current accounts, only a masochist would enjoy having one. And the three reasons? Read from the top again :-).
Now that is a million-dollar question! Even though the National Population Commission (NPC) estimates that there are currently about 198 million Nigerians (as at 2018), the truth of the matter is that nobody knows.
When the head of the population commission in 2013, Festus Odimegwu claimed that no credible elections have ever been conducted in Nigeria, he lost his job (some say he resigned, others say he was fired).
So, if we cannot trust our census figures, how else do we estimate Nigeria’s true population? In this article, we will attempt to estimate that amount by using the following proxies
Number of active phone users
Number of unique bank verification numbers (BVNs)
Number of unique internet users.
Before we proceed, a few interesting notes about Nigeria’s population:
What is the major cause of the on-going population controversy? Many are quick to make reference to Federal allocation. However, since the discovery of oil, the 13% derivation has played a bigger role in determining the allocation that each state gets. So perhaps the biggest benefit of huge population figures is for elections.
Research has shown that although the absolute population figure has increased over time, the relative percentage attributed to each state (and region), have been exactly the same since 1963! For example, the South-West states have exactly 20% of the entire population, for both the 1991 and 2006 census figures. This is regardless the rapid urbanization to places like Lagos. Feyi Fawehinmi (popular Nigerian blogger and Guardian columnist) has been writing about this observation for almost a decade now – wonder who has been paying attention.
Do we have your attention now? If yes, let us see if we can make sense of our available data.
Number of active telephone users
To derive Nigeria’s population using number of active lines, we simply gross up the total number of active lines (160 million as at April 2018), by the proportion of phone users with dual sim cards. This gives an estimate of about 80 million people
Can this be the number of Nigerians? Of course not. If we assume our figures are correct, this could only be the estimated number of people with telephone lines in the country. The next logical question is what proportion of Nigerians use telephones? Very difficult question to answer. Our research revealed that there was no definite answer to this question. We did find out that there are about 21 million smart phone users in Nigeria though. But this does not advance our research in anyway. We are left to make other deductions from “census” related data. Who are the people who do not own telephones, and why do they not own telephones? Two simple but very broad reasons. The first is age, and the second is poverty. Therefore, if we eliminate those who are too young to own phones (bear in mind that this is very subjective, given that many kids own mobile phones), and we eliminate the absolute poor (on the assumption that they cannot afford mobile phones), we just might get a sense of the number of people in this country.
For the age range proportion, we will rely on the General Household Survey (GHS) conducted in 2012/2013 by collaboration between the National Bureau of Statistics (NBS), Federal Ministry of Agriculture and Rural Development (FMA&RD), the National Food Reserve Agency (NFRA), the Bill and Melinda Gates Foundation (BMGF) and the World Bank (WB). We find the GHS useful for in extracting “proportions and percentages”, because the study was carried out on 5,000 households. The proportions have since been used to generalize. For instance, let us assume that 38% of those surveyed were found to be below age 10, the figures are extrapolated and used to estimate the total number of children below age 10 in Nigeria (which gives a figure of about 75 million children below 10 years old, if we assume that the population of 198 million people is accurate).
We have not been able to find any specific source or study which references the age from which children start to use mobile phones in Nigeria. However, a study done by Influence Central (a marketing consultancy), found that the global average is about 10 years old. Another study carried out by the Interactive Journal of Medical Research, found out that some parents allow their kids to own phones from age 6. Age 6 appeared to generally be the lowest age we could find. Therefore, for the purposes of our study, we will eliminate the proportion of the population aged between ages 0 to 5 years old. Again, according to the GHS, this proportion is about 17.4% of the population surveyed.
We also inferred from the NBS study, carried out on the prevalence of absolute poverty in Nigeria between 2009. The World Bank defines extreme poverty as those living below $1.9 per day. Using the current Central Bank of Nigeria (CBN) exchange rate, that amount translate to over N211,000 in a year, which results to a monthly figure that is around the current minimum wage. It is for this reason we prefer the NBS definition of absolute poverty as those living below N55,235.20 a year, which translate to about N151 a day – a more realistic picture of poverty in Nigeria.
Based on the NBS, we will use the data to generalise for the population in relative terms. Hence, we will assume that the proportion of the population living below the poverty line is actually 62.6% as stated in its report, according to the poverty survey carried out
Now we have proportions for poverty and under-aged kids. What about the overlap of these two variables? The United Nations Children’s Fund (UNICEF) in conjunction with the NBS, estimates that of the total population of Nigerian children, 64% of them could be described as extremely poor[1]. Therefore, our proportion of kids who are poor and living in absolute poverty are about 22.5% of the population (62.6% – [64%*62.6%])
Using the number of unique active lines in Nigeria and taking all the above into the consideration, we come up with the following table:
Description
Proportion
Number of People
Kids below 5 years
17.4%
23,251,264.20
Absolute poor (excluding kids below 5)
22.5%
30,114,395.98
Unique phone users (estimate)
60.1%
80,262,295.00
Estimated Population
133,627,955.18
As you are aware, this number is just to get a sense of the population based on available information and does not represent an authoritative figure in any way. At best, we can “theorise” that based on the number of active phone lines (and other data points used), we expect Nigeria’s population to be between 99 million and 133.6 million.
One major limitation with the above analysis is the proportion used to account for the overlap. The number of children eliminated from the total estimation are aged from 5 years and below. However, the UNICEF study combines children aged between 0 to 14 years for its report. We have adopted this proportion in the absence of alternative data, as a similar report from the World Bank on poverty, classifies children in a similar manner, and the proportion is quite like the one used to determine the table above.
Number of Unique BVNs
Another way to estimate the number of people in Nigeria, is to extrapolate using the unique amount of Bank Verification Numbers (BVN) in the country. This proxy is particularly interesting because it is already filtered for duplicates, thereby doing away with further need for “fine tuning”. According to the CBN, there are about 33.2 million BVNs in Nigeria as at May 2018.
Description
Proportion
Number of People
Kids below 17 years
44.0%
45,956,873.32
Financially excluded adults
21.0%
27,377,358.49
Unique BVNs
35.0%
33,200,000.00
Estimated Population
104,447,439.31
The question now is, what proportion of the entire population is this? This was difficult data to acquire, as most estimates are derived from the population. We did find an independent survey carried out by Ericsson Consumer Labs in 2015, which revealed that only 53% of Nigeria’s population was part of its banking system. If we assume that this is representative of the entire adult population (as children were not surveyed for the purposes of financial inclusion), we would then have to eliminate the proportion of the population that are aged between ages 0 to 17 (as they are ineligible to own bank accounts). Based on the GHS, the proportion of the population of those aged below 14 years, are about 44% of the entire population. If we adjust these figures for these two population groups, we get another population estimate as follows:
Based on this estimation, the people in Nigeria could be anywhere between 59 million and 104 million.
Like the first estimation, this analysis has a fundamental limitation of isolating the children aged between ages 15 years to 17 years, as the presented in the GHS, only speaks to children aged between 0 and 14 years old.
This is the lowest estimate so far. Not surprising because the base for unique internet users, is smaller for mobile users and we have applied the exact same methodology. The limitation of this analysis is the same as the first. Additionally, this approach has the downside of applying the metric that 50% of mobile phone users have dual multiple lines, which indirectly implies that all internet users access the web using mobile devices. Another flaw with this approach is that it does not isolate internet users into categories, as some users will access the internet using their mobile phones, as well as their desktop computers. While we can attempt to make some of those adjustments here, it will only result in giving us a much lower figure than what we already have (which is the least of the three approaches). We will therefore proceed with the result of this analysis as is.
Are some of your estimates and “proportions” not very old?
That may be true. But even if we take the oldest data point we have used, which relates to poverty rates in 2010, it still yields some interesting results. To be very pessimistic, let us assume that all our findings above relate to 2010. We then apply the World Bank population growth rates between 2010 and 2018 (estimated). This gives us the following estimated figures for 2018:
Approach
2018
Population (Phone Users) (‘millions)
164.9373
Population (Unique BVNs) (‘millions)
128.9197
Population (Internet Users) (‘millions)
95.5565
So even if we assume that the figures above are correct, the highest number is still off by about 17% of the current 198 million, while the lowest figures are off by a staggering 52%.
Notwithstanding, there is a tendency for the first set of figures to be more representative of the true picture, because this study has made use of about 8 data points, and only one of them (the one relating to poverty) is more than 5 years. Some of the other proxies used are as recent as April 2018.
Case Study for other Countries: Canada and Ghana
To validate our methodology, we have tested it using data available for other countries. One of the countries is in Africa (Ghana), while the other is in North America (Canada). We have chosen Ghana because it is like Nigeria in several ways (socio-economically and culturally). We have chosen Canada because of its differences with Nigeria, both in terms of physical distance and developmental level. We will provide more insight into the rationale for our selection, as we examine each country in detail.
Canada
Canada is the second largest country in the world after Russia in terms of Area, occupying about two-fifths of Norths America. Because of its enormous size, it is often referred to as one of the world’s most sparsely populated countries.
We use the table below to highlight major socio-economic and other differences between Nigeria and Canada:
We have also outlined some reasons below on why we believe the population figures in Canada are correct:
Statistics Canada, the official body responsible for statistics in Canada (which also conducts its census), is a member of the United Nations Statistical Commission (UNSC). UNSC is the highest body of the global statistical system. It brings together the Chief Statisticians from member states from around the world. It is the highest decision-making body for international statistical activities especially the setting of statistical standards, the development of concepts and methods and their implementation at the national and international level (United Nations, 2018).
Statistics Canada conducts a census of Canada’s population every 5 years. Such frequency minimizes the probability for errors and enables high degree of accuracy.
In addition to the census conducted every 5 years by Statistics Canada, there are about 350 active surveys on virtually all aspects of Canadian life. Such robust database of information, enables Canada to use other proxies to validate its census figures.
Based on our research, there have been little or no disputes regarding the total number reported by Statistics Canada as official population figures. We have identified only two instances of dispute: One relates to the drop of the Jewish population in Canada in the 2016 census, of which the bone of contention was the survey and questionnaire design/validity and not the total census figure. The second relates to an overestimation of the Metis Nation in Ontario, where the main issue was whether people identified themselves correctly or not, when filling the surveys.
In both cases of dispute, the aggrieved parties only had issues with the methodology and not the overall census. It is therefore safe to say that Canada’s official population figures are reliable.
Canada’s Population Determination
According to Statistics Canada, there are 35,151,728 people in Canada. We will therefore use the three approaches adopted to determine the population for Nigeria, to see if we can derive an estimate for the Canada’s population:
Number of mobile phone users
Using a similar methodology for Nigeria, we obtain the number of children who are not old enough to use mobile phones – we use our previous baseline age of five years old. We also include the population of the country that is poor, on the assumption that they cannot afford mobile phones. We add the two groups above to the number of active phone lines (after adjusting for those with dual sim: representing only 4% of the phone owners, as dual sim phones are less prevalent in developed countries), and we get the table below:
We also apply a similar approach here. First, we get the number of people who are not old enough to get a bank account. Secondly, we add the number (Statistics Canada, 2018)of adults who are not within the banking system. It is interesting to note that the number of financially excluded adults in Canada is over two hundred thousand people, which shows the financial sophistication of the country. Finally, we add the number of unique bank accounts to arrive at the following: (Statista, 2018)
Last but not least, we also use the number of internet users. Like the mobile users, we also isolate the age group of the population not old enough to use smart phones, and those that are poor as well. These are then added to the number of internet users in Canada to arrive at the following:
From the analysis above, we can see that all approaches are with the range of 34,559,348 and 36,371,449¸which is within range of the estimated population as provided by the official figures. The same limitations stated for Nigeria also applies for Canada.
Ghana
Ghana is a West African country bordering the Gulf of Guinea between Togo and Cote d’iviore. Ghana is considered one of the leading countries in Africa partly because it was the first black country south of Sahara to achieve independence from colonial rule and partly because it has considerable natural wealth.
We use the table below to highlight major socio-economic and other similarities between Nigeria and Ghana:
The last population Census in Ghana took place in September 2010. Since then, Ghana’s population figures have been based on estimates. According to World Population Review Ghana has an estimated population of 29,527,468 as at August 2018. We will attempt to determine Ghana’s population using the component method used for Nigeria; that is Number of Mobile Phone users, Number of Unique Bank accounts and number of internet users in Ghana.
Number of mobile phone users
In using this estimate, we obtain the number of children below 5 years, who are assumed to be too young to use cell phones, then we obtain the proportion of the population that is living below poverty line, using the assumption that this group of people cannot afford mobile phones. However, this estimation is flawed in the case of Ghana because dual phone users are very prevalent. Unlike Nigeria where there is a sim registration process and an extrapolation of the number of unique phone users, in the figure for Ghana, there is double counting for people who have more than one phone hence the total figure is inflated.
Description
Proportion
Number of People
Kids below 5 years
13.5%
3,734,670.00
Poor Population (excluding kids below 5)
24.2%
6,675,042.00
Unique phone users (estimate)
128%
26,090,000.00
Total
36,499,712.00
Number of Unique Bank Accounts
Using unique bank accounts to estimate the population, we first get the number of people below 15, because they are not officially old enough to have a bank account. Next, we find the number of financially excluded adults. These adults are not within the banking system. Finally, we find the number of unique Bank account owners in Ghana. And add it all up to arrive at the following:
Finally, we will use the number of internet users in Ghana to estimate the population. Just like in the mobile user calculation, we isolate kids below the age of 5, because they do not have phones to use in subscribing to the internet. We also exclude the population of people living below poverty line because they also do not have the means or the device to subscribe to the internet. We then add this to the number of internet users in Ghana to arrive at the following:
From this analysis, we can see that all estimates using the three approaches are between 23,715,612 and 36,499,712. The figure using the mobile phone users 36,499,712 failed to consider, the number of dual seem users. This figure is above the official population estimate by 30.9%. The second estimate using the number of unique bank accounts is 29,310,655 and it deviates from the official population estimate by 0.73%. The final estimate using the number of unique internet users differ from the official population estimate by 19.7%. The same limitations stated for Nigeria also applies for Ghana.
Conclusion and Potential Implications
So, what does this all mean? Put simply we have been planning based on wrong figures. It could also serve as a pointer for investors looking to come into the country, as they are better able to make plans on a more realistic market size.
Meanwhile, we leave you with the following calculations based on our revised estimations. Perhaps these would aid better planning:
Without Growth
Approach A
Approach B
Approach C
Estimated Population
133,627,955
104,447,439
77,417,421
Metric
Population density
145
113
84
923,768
Mobile Phone Penetration (Unique)
60%
77%
104%
80,262,295
Internet Penetration (Unique)
35%
45%
60%
46,500,000
With Growth
Approach A
Approach B
Approach C
Estimated Population
164,937,295
128,919,716
95,556,503
Metric
Population density
179
140
103
923,768
Mobile Phone Penetration (Unique)
49%
62%
84%
80,262,295
Internet Penetration (Unique)
28%
36%
49%
46,500,000
[1] UNICEF Report on Nigeria – Global Study On Child Poverty And Disparities
