According to EFInA (Enhancing Financial Innovation and Access), Financial Inclusion is “the provision of a broad range of high-quality financial products, such as savings, credit, insurance, payments, and pensions, which are relevant, appropriate and affordable for the entire adult population, especially the low-income segment” (EFInA, n.d., p1). It requires that financial services (bank accounts, credit, insurance, remunerative savings, and payments and remittance systems) be available and accessible to the underbanked and unbanked.
The Global Findex database showed that as of 2017, there were about 1.7 billion unbanked adults worldwide (Asli et al., 2017). The database also revealed that nearly 50% of these people lived in Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan (Asli, et al., 2017) as shown in figure 1 below.
Figure 1: Adults without a bank account in 2017 Source: Global Findex database Note: Data not displayed for economies where the share of adults without an account is 5% or less. Reproduced under the Creative Commons Attribution license
The map shows that Financial Exclusion is mainly confined to the developing world. Figure 2 below shows that 4% of the world’s unbanked adults live in Nigeria. Between 40–64% of adult Nigerians are excluded from any form of financial services, and ownership of Mobile Money accounts in Nigeria stayed at between 0% and 9% between 2014 and 2017 (Global Findex Database, 2017).
Figure 2: Distribution of Adults without a bank account in 2017 Source: Global Findex database Reproduced under the Creative Commons Attribution license
A recent report dubbed Nigeria “the poverty capital of the world” (Kazim, 2018) and the World Bank’s 2018 atlas of development goals showed that Nigeria had 86.9 million people living in extreme poverty (The World Bank Group, 2018). Compared to the second runner up, the Democratic Republic of Congo at 60.9 million people, that is saying something. One just can’t help wondering if our leaders care even just a tiny bit that Nigeria has overtaken India (with a population seven times that of Nigeria) as the country with the most significant number of people living below $1.90 a day (World Poverty Clock, 2019). Well, that’s a rant for another day.
Figure 3: Top 10 African countries with extreme poverty (June 2018) Source: The World Bank Group SDG Atlas 2018 Reproduced under the World Bank’s Open Data Initiative
Financial illiteracy has been blamed for the statistics in Nigeria. It is argued that the main reasons for financial exclusion in Nigeria are poverty and illiteracy (Martin, 2008). As of 2015, the adult (15 years and over) literacy rate for Nigeria was 59.6% (Knoema Database, 2015). It is the popular belief that most financially illiterate Nigerians are the uneducated and the under-educated. Illiteracy has been linked, consciously or unconsciously, to financial illiteracy. This conception is even somewhat backed by research and statistics. But, is this really the case? Is it true that the illiterate shy away from financial instruments and services mainly because they are unable to grasp the basic concepts of finance? Is this really the full picture?
Financial literacy can be defined as the ability to identify, acquire and utilize financial information and services independently. It is demonstrated by the ability to display the basic skills needed to function in the present economy. These basic skills include numeracy, problem-solving and general prose literacy (Robson, 2012), as well as the ability to figure out abstract things. The interesting thing is that the very same basic skills are required to get a grasp of mobile smartphone technology as well. In fact, it can be argued that mobile telephone technologies are much more complex than financial technologies. This, however, hasn’t stopped the developing world from taking up mobile technology. Sub-Saharan Africa is the fastest-growing mobile region in the world (Damian, 2018) with over 400 million mobile subscribers and an overall subscriber penetration rate of 44% (GSMA, 2018). About 250 million of these mobile subscribers own a smartphone (Damian, 2018) and this figure is expected to grow to 690 million by 2025 (GSMA, 2018). And believe me, not all those 690 million smartphone owners will be university graduates. Just ask the Bodaboda driver in Uganda or Bàba Làsìsì who sells beef in Sábó market.
Figure 4: Mobile subscription and penetration in Nigeria and Africa Source: Jumia Mobile Report: Nigeria 2018
The big question now is: if digital inclusion is exploding across the continent, why then isn’t the same true for financial inclusion? When mobile phones first hit the scene in 1983 with the Motorola DynaTAC 800x, they seemed so advanced and brain-wracking, and they came with fat user manuals. The Motorola DynaTAC 800x cost almost $4,000, was about a foot long, and had a battery life of a half hour. IBM’s Simon was probably the world’s first commercially available smartphone. It cost about $1, 099 and was equipped with a calendar, address book, clock, notepad, PDA, email service, fax service, a QWERTY keyboard, and a touchscreen. In the 26 years since Simon’s debut, smartphones have come a long way. They have become more affordable and pretty easy to use. In order to stay competitive, phone makers have had to “dumb down” the previously complex technologies that run these devices by hiding these technologies behind easy to use interfaces. We went from having to tap like a million times just to get to the figure 9 to QWERTY phone pads with emojis. Even my three-year-old niece can pick out the camera and YouTube icons in a heartbeat and knows to swipe to unlock her mum’s phone. Now, Bàba Làsìsì, who didn’t go beyond primary 6 and who can’t speak a lick of English, has WhatsApp on his phone and can torment all his friends and kids with random broadcast messages that threaten doom and damnation if you don’t forward them to 20 people. He didn’t need a degree or the ability to speak Queen’s English to be able to take selfies on his phone or to send a message to Mama Put to let her know that her cuts of meat are ready. The figure below shows that a larger percentage of Nigerians can carry out several functions on a smartphone than are able to perform financial transactions.
Figure 5: Phone user capability in Nigeria in 2017 Source: FII Nigeria 2017 Wave 5 Report
Why have people taken to mobile technology in a way that has seemed impossible with financial services and products? The truth is that people simply developed functional literacy around mobile phones — how to identify numbers, key in airtime tokens, read balances, etc. It helped that the mobile phone developers made the technology accessible and within reach of everyone, educated or not. The user interfaces on phones are very intuitive and make navigating the otherwise overwhelming world of technology pretty straight forward. It is easier for Bàba Làsìsì to recognize the phonebook icon and call button on his phone than for him to wrap his head around the notion of a revolving line of credit.
What then is this telling us about the so-called illiterate Nigerian? Illiteracy doesn’t necessarily mean that people are dumb or have low IQ. Illiteracy is mostly a function of access, or a lack of it, to formal education. Illiteracy cannot take all the blame for financial illiteracy and financial exclusion. In fact, a survey carried out amongst students from a large metropolitan university in South African revealed that 17% of the respondents were financially illiterate, and 68% moderately financially illiterate (Shambare & Rugimbana, 2012). This shows that education does not necessarily imply financial literacy and that even the educated still struggle with some aspects of their finances.
The world’s poor and un(der)educated don’t need to go to school or have a fancy degree to understand banking. The banks need to borrow a leaf out of Apple and Samsung’s book and present financial services and products in such a way that they can be understood using functional literacy. If undergrads, who are technically considered as literate if they could get to that level of education, don’t understand the concepts of compound interest or have any idea what a credit history is, how then is the man on the streets expected to do that? these banking concepts need to be simplified and made as easy to grasp as tapping an icon on a phone screen. If using an App required having to type in some code in C++, smartphones would have died out eons ago.
The simple truth is this: having a bank account should be as simple as using a mobile phone; having insurance should be as simple as an understanding risk; services should be cheap enough to be within the grasps of the poor — the poor are very sensitive to pricing. In my opinion, banking for the poor should be free, and the banks should figure out how to make money off their larger customer base; understanding how your savings are performing should be as easy as saying “Ok Google.”
Smart but broken and unfulfilled—a common tale. Smart people working for less smart bosses, dreaming of boldness or fleeing for greener pastures. Sometimes being smart just isn’t enough.
Recently, I was enduring a never-ending stream of ranting from one of my mentees (why don’t I ever get paid for this?) about how he gives solid business propositions, but the founder and chief executive of his company doesn’t take his advice. But then when the so call CEO made a mess, my mentee had to do the cleanup.
Of course, my mentee is super smart. First class engineering from a top Nigerian school with IQ as many as floors in the Shanghai Tower. But then, here is a broken man who obviously deserves more and yet isn’t fulfilled. He works in a company that isn’t doing too well because it’s probably poorly managed by the CEO who tells him that if he was that good, he should have started something better.
Does this scene resonate with you? Probably yes.
His story forced me to look around, assess my own life and that of many friends, families, mentees, and random agberos around me. Why do apparently smart people get stalled in poor careers and [some] dumb people become successful? Was it luck? Or business smarts?
Of course, luck plays a role, but statistically, luck should smile on as many smart people as average jones. But empirically, I see most intelligent people working for those less smart. Meanwhile, you would expect the most successful people to be smart since they can use their intelligence to exploit opportunities more but alas, probably around me, this ain’t the case.
Sometimes we talk about hard work. Yes, working hard pays and working smarter pays better. But of what benefit is that if you are working smartly for your dumb bosses and you don’t get any of the upsides and only all the downsides? Most of the hardest working smart people I know work for less-smart bosses, and they rant about it so much my ears bleed. I need to see an ENT.
One thing that seems to be consistent with many founders is that they are bold. Successful founders come in all intellectual shapes and sizes and in various forms of dedication to the hours. But what you won’t take from them is their ability to charge headlong into whatever they believe. They are bold enough to make the leap, not sometimes of faith but many times out of the sheer ballsiness of it. The bold veer towards the edge of insanity to the right, conmanship to the left, inability to access limits to the top, and sheer audacity to the bottom.
I have seen guys walk up and promise delivery of certain products and services without a shred of where and how they would do it, sign the contract and then scamper around to deliver. Sometimes they fail, but when they succeed, maga pays!
And what do the bold do? They employ the smart “you” and “me” to make their dreams come through.
We ain’t all born bold – either because we lost our balls somewhere or we never even came with them. Therefore, we compensate by reading, become thought leaders (whatever that means), get multiple degrees and useless certifications. And when things get really awry, we skip town like Andrew to the US as illegal aliens or to Canada to freeze dry our brains in the name of greener (and extremely cold) pastures.
By the way, it’s not a crime not to be bold; if you don’t have it, you can’t do anything about it. Or maybe you can. I once heard that pretending to be brave and being bold are the same.
But to my many friends and mentees, if you think you are smarter than your boss, just suck it up and spare me the rant. Either you grow your cojones or zip your lips.
Recently I started seeing a spike in the number of inquiries made by friends, fintechs, and random other people about Mobile Money in Nigeria. And it’s not because they are suddenly having altruistic ideas for financial inclusion. Something must be cooking!
Let’s get the basics right Mobile money is a form of banking where your account number is your mobile number. It’s as simple as that. Any other definition is an oversabi. After the successful debut of mPesa in Kenya, many countries tried to launch their copycat mobile money system.
At the start of the mobile money madness, CBN gave out 23 licenses, 10 of which were by banks.
After a flurry of activities, things chilled. Banks subsequently developed acute amnesia about their licenses went back to their bread and butter: Commercial Banking.
Why and how mobile money failed will always be contentious. I have written about it, others have different opinions. The one thing we ain’t arguing about though is the fact that mobile money failed to hit the sweet spot.
New interests in Mobile Money The emergence of fintechs has thrown open new possibilities of what can be done with moribund mobile money licenses. Most fintechs within the payment space are having a lorry load of challenges connecting to banks. For example, a common request would be funding of payment transactions from bank accounts for which banks haven’t provided any simple APIs to work with. Those doing savings and personal financial management want to keep money in a legal way and also allow topping off investments from bank accounts. That is another problem.
Just like the way banks repurposed USSD codes meant for mobile money in 2014, fintechs are circling around banks to see how mobile money can be repurposed for better things.
We all go broke at different times, and the natural thing would be to turn to our bankers. After all, we have been putting our meager savings in there for a while; and one good turn deserves another, right? Wrong!
You are probably rolling your eyes now because we all know that Nigerian banks hardly lend to individuals no matter how compelling the case is. Yes, I know a few connected or lucky souls get loans that don’t come from your account going into debit because of SMS alerts. I also know a few banks, such as Access Bank, will readily give you loans under 30 seconds. These are outliers, and 2 trees don’t make a forest. The official numbers paint a grim picture.
According to the National Bureau of Statistics (yes, they keep tabs!), loans to individuals, which averages N88,000, constitutes just 0.7% of all loans while the ones to awon baba alaye of N1B and above is 82% of all credits Nigerian banks have advanced.
We can both see that it would be easier for a polygamous camel, with its harem of fat camel wives with luscious humps, 100 baby camels, and 3 side-chicks camels, to stroll through the eye of a needle than for you and me to walk into a bank and walk out with our loans.
Everyone who’s got least a D in Economics knows that credit is the grease of every economy and the cogs are the individual spenders, while SMEs are the backbone. So why are bankers bent on keeping Nigeria from attaining great heights? I guess this is the reasons why bank CEOs get bashed at every turn for the poor state of the economy. It has become unpardonable as they deliver multi-billion profit year on year.
It seems the bashing, name calling, and mudslinging doesn’t work on the bank CEOs anymore. They just don’t care.To rub salt into injuries, the few times banks want to give you a loan, they demand so much documentation and collateral that people are stumped “if I had this much collateral and documents, I wouldn’t even come for a friggin’ loan!”.
So, let’s go get our pitchforks and deal with these evil bankers! Not so fast; there are at least two sides to every story.
Let’s do a walk back and ask ourselves, why does anyone even set up a bank in the first place? To make tons of cash! Shareholders ain’t Father Christmas. Nobody goes through the pain of setting up a bank for charity. And the way banks make money is simple. They take money from those who have excess cash or who want to save and lend part of it to those who need money. The gap between the interest they pay the savers and what they charge the borrowers is their profit (after paying off your cousin’s salaries and the cost of the ATM withdrawal you made at another bank’s ATM).
If banks only make money when they lend, why ain’t they lending to me and you yanfuyanfu? Obviously, if the money won’t come back, they can’t lend it because if they can’t pay the savers when they come for their money, kasala go burst.
There are two critical things lenders look out for when thinking of handing over cash to you; ability to pay and willingness to pay.
Ability to pay refers to the capacity of your cash flow to pay back according to the repayment schedule, the probability of your business to grow as to generate enough revenue to pay, etc. This is where complex models are used to check you out. For example, it’s a standard practice that you must not use more than 33% of your monthly salary to pay back loans because irrespective of the sincerity of your heart, anything more could impair your day-to-day ability to pay back. Therefore, when banks ask for your statement of account, payslips, invoices, contracts, blah blah, this is what they want to calculate.
If you ask for much more than a bank think you can pay back, they will reduce it or the bad ones will kick your scrawny ass out of their office.
Willingness to pay back loans is a big deal, and it is so fundamental to credit that if you get this wrong, you are dead. I mean deader than a joint of beef. If the ability to pay back is impaired, a loan can be restructured, and it happens every time. However, when borrowers don’t want to pay back, hell boils over.
Willingness to pay back is a function of a working society and I ain’t sure if Nigeria can be classified as working, per se. In other countries where individuals get easy access to cash, you are in so much trouble if you don’t pay back. In fact, nobody needs to warn you to respect yourself. In places like Dubai, it’s even a criminal offense not to pay back: you skip your loans, you find yourself a lovely prison studio apartment.
Nigeria, being a place where law and order is an illegal alien, banks go around this issue by demanding collateral, things they can sell on Jumia or Balogun market if you don’t pay back. And not only do they request these, they do extensive checks on the documentation to ensure it actually belongs to you and that you haven’t pledged it to another bank. Stories of fake documents used for loans are twelve a kobo.
Crosschecking validity of documents in Nigeria is extra difficult as our governments are not automated. Just try to confirm land titles and vehicle authenticity and you can have an idea of the stress.
Since these processes are painful, long and super annoying, Nigerian banks quickly wised up to save their energy for higher ticket loans. Why spend 2 weeks on documentation for a N100,000 that you only make N2,500 on when you give someone for a month at 30% per annum? It would take precisely the same efforts to document an N1B that you make N2.5M at the same rate.
Of course, loans go bad for small and big borrowers. While we hear of the bigger boys with bad loans, the percentage (count) of smaller loans going bad is higher. Banks can afford to get a Senior Advocate of Nigeria to go after the big boys to get their money back and trust me, lawyers are not cheap and don’t do promos. What is the cost-benefit analysis of sending lawyers after a N75,000 loan when the amount in question isn’t enough to even pay the lawyer for a day’s job?
The good news is that fixing willingness to pay, that is to make it extremely painful and expensive for borrowers to default, can be easily fixed. The bad news is that it takes so many political balls only few would attempt it because it would hurt a lot of politicians. We don’t even need the FGN to do any law, there should just be a regulation between banks, backed by the CBN, that if you don’t pay your bills, you should be banished from the financial system. No need to take you to court or send lawyers after you.
If that happens, expect banks to start lending easily without going through too many documentations. They know you will pay back. Easy credit will allow people to have access to good things (consumer spending) while paying back over months. Mortgages will become available. Builders will build more and cheaper as there is a ready flow of buyers. Suppliers of labor and materials to builders will sell more.
Multiply that for every sector of this damned economy and you can only imagine how we will rule Africa.
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
