Highlights
- The elites don’t care if your bread is ₦2,000 as long as it looks imported. The rest of the population wants it in slices of ₦100.
Some companies have found ways to survive the missing middle:
- FMCGs (Fast-Moving Consumer Goods): The “sachet economy” is no accident. Smaller packs of noodles, milk, and detergents allow the low-income earners to buy in tiny doses.
- Fintechs: OPay and PalmPay thrive on volume-based transaction fees, small margins spread across millions of users.
- Telcos: MTN and Airtel use combo bundles to convince customers they’re getting more value, even if actual margins are slim.
- D2C Tech/SaaS: The freemium model works; start free, then upsell premium features to those who can afford it.
In Nigeria, the middle class is not dying; it is already a ghost. We still talk about it at conferences and in policy papers, but look around, who exactly belongs there?
A banker who spends half his salary on rent? A small business owner who cannot remember the last time NEPA provided twelve hours of light in one stretch?
According to SBM Intelligence, Nigeria’s middle class stood at about 23% in 2014. But the tide has since turned. By mid-2023, the World Bank reported that about 4 million Nigerians had fallen back into poverty, while another 7 million teetered on the edge. By 2025, there is a huge collapse.
Meanwhile, inflation is eating through whatever is left of disposable income. Food inflation hit 22.74% in July 2025, and core inflation sits at 21.88%. The top 10% of Nigerians now control over 40% of national income, while the bottom 50% are stuck fighting for survival.
When over 60% of urban Nigerians rely on self-medication, informal transport, and unstructured retail, it is no longer “a tough season.” It is a new normal and in this new normal, how on earth do you price your product?
The Vanishing Middle Class: Why It Matters
Every economy needs a middle. That’s where consumer stability lives. They are the ones who buy refrigerators without needing loans, who upgrade phones every two years, and who keep retail, housing, and education markets ticking.
Nigeria doesn’t have that anymore. Less than 1% of Nigerians earn above ₦1 million monthly, and only 4.9% earn above ₦500,000. The rest are scattered between survival wages and outright joblessness.
As of 2025, 28.21% of Nigerians live on less than $2.15/day. Disposable income per capita sits at just $700.54. What does that mean for entrepreneurs? You’re not selling to a “broad market.” You’re selling to either people who can pay without blinking, or people who will haggle you into bankruptcy.
The Pricing Dilemma for Businesses
Here’s the trap:
- Luxury or Mass Market? The elites don’t care if your bread is ₦2,000 as long as it looks imported. The rest of the population wants it in slices of ₦100.
- Affordability vs. Profitability. You can price low enough to reach millions, but inflation and FX costs will make margins vanish.
- Regulatory Whiplash. One month, crypto is booming, the next, it’s banned. Tax regimes shift faster than traffic lights. Your pricing model gets rewritten every quarter.
Businesses in Nigeria aren’t just competing with rivals but with poverty, inflation, and policy challenges.
Case Studies: Who’s Getting It Right?
Some companies have found ways to survive the missing middle:
- FMCGs (Fast-Moving Consumer Goods): The “sachet economy” is no accident. Smaller packs of noodles, milk, and detergents allow the low-income to buy in tiny doses.
- Fintechs: OPay and PalmPay thrive on volume-based transaction fees, small margins spread across millions of users.
- Telcos: MTN and Airtel use combo bundles to convince customers they’re getting more value, even if actual margins are slim.
- D2C Tech/SaaS: The freemium model works; start free, then upsell premium features to those who can afford it.
Consumer Behaviour in an Unequal Economy
Nigeria’s consumer map is brutally simple:
- The Rich: They are price-insensitive. They care about status, speed, and quality.
- The Low-Income Earners: They are hypersensitive. A ₦50 increase in bread can shift demand instantly. They demand micro-units, alternatives, and endless bargaining.
- The Missing Middle: They used to stabilise markets. Now, they exist mostly in policy papers.
Over 50.1% of household income goes to food, leaving little for healthcare, transport, or leisure. That is why solar panels, ride-hailing alternatives, and self-medication are on the rise. Consumers are not “choosing” to be frugal; they are trapped.
Strategies for Pricing in a Two-Tier Market
- Barbell Pricing
Offer extremes: a premium tier for elites, and a stripped-down tier for mass affordability. This strategy suits SaaS platforms, logistics, and electronics. - Micro-Subscriptions & Pay-As-You-Go
Break products into bite-sized payments. Nigerians are comfortable paying ₦100 daily, but balk at ₦3,000 upfront. Healthcare, education, and D2C tech can thrive here. - Bundling for Value Perception
Package products to create perceived value. Telecoms use this trick well—voice, SMS, and data in one bundle, even if each component is shrinking in quality. - Localisation & Cost Efficiency
Produce locally where possible to reduce FX shocks. The cost savings can be passed down or used to preserve margins. - Consumer Trust as Currency
In this economy, consistency itself is a competitive advantage. If you can hold your price stable for longer than competitors, consumers reward you with loyalty.
Policy, Inflation, and the Business Future
The real elephant in the room is government policy. Unstable taxes, sudden levies, and currency devaluation keep businesses constantly adjusting prices. If the system keeps squeezing both entrepreneurs and consumers, more companies will simply exit. Already, multinationals like Shoprite and GSK have left, citing impossible conditions.
A sustainable middle class will not magically reappear without reforms: wage growth, inflation control, and stable policy. Until then, businesses must learn to navigate the extremes.
Surviving the Missing Middle
Nigeria is a country where entrepreneurs are forced to price for a market that no longer exists; the middle class is gone, leaving only the very rich and the very poor. That is not just an economic problem but a business nightmare.
But survival is possible. Through barbell pricing, sachetisation, micro-subscriptions, and bundling, businesses can straddle both ends of the spectrum. It is not perfect, but it is the only way to stay alive until policy, wages, and inflation create a new middle.
In Nigeria, pricing is no longer a strategy but a survival skill. And those who master it will outlast the ghosts.
