IATA, trade association of airlines, has released the number of projected air passenger travelers in Nigeria till 2035; its 2018 was different from the one provided by Nigeria’s National Bureau of Statistics [it’s fair to choose NBS data here]. It expects 11 million air travelers in Nigeria this year for both domestic and international travels. Looking deeper into the projection, the growth does not really look great. Of course, if you have only 30 million addressable market size, using my model, you do not have much rooms to grow in the aviation sector.
Yes, I have postulated with secondary data that in most sectors only about 30 million Nigerians earn income to pay for anything. You may have 200 million people in the nation but you have to convince just only 30 million to open their wallets. Interestingly, from Passion Incubator report this morning, it concluded that its data shows that only 20.9 million people are in paid employment – i.e. about 25% of the total workforce in Nigeria.
Someone sent me an email for explanation on this apparent discrepancy between my 30 million and what Passion Incubator has. I am yet to read the Passion Incubator report in details but it is very possible we are saying the same thing.
In Nigeria, only 17 million people were paying taxes when I first put my piece [it is now 19 million using latest data]. I believe the informal sector players do earn income even though most do not pay taxes to government – I estimated the non-paying tax number to be 13 million to arrive at 30 million. Also, if you look at the number of bank accounts in Nigeria using the bank verification number (BVN), you will be in the neighborhood of 35 million. While not everyone that has a bank account earns wage, there is a very huge overlap that the 30 million makes sense.
The Nigerian government has disclosed that 19 million citizens are now paying taxes from the 65 million economically active people who “are not tax compliant”.
Kemi Adeosun, Nigeria’s minister of finance at a meeting with a World Bank Mission of 10 Executive Directors led by Patrizio Pagano, said the country’s taxpayers’ base has risen from 14 million in 2016 to 19 million in 2018, an additional five million people.
Yet, my model is not really about the number of people on paid employment, rather the cohort within the addressable market for mostly non essential items. So, food and medicine will always have the full population of 200 million as target market while non-essentials like movie streaming can only attract from the 30 million. With government bringing extra 2 million people into the tax-fold, I can update that 30 million to 32 million people now.
Back to Passion Incubator report, it is possible it estimated the total pool of non-taxpaying citizens but earning income to be about 2 million which when added to this 19 million tax payers (which indeed are on paid employment) gave it 20.9 million. My model was larger as I used secondary data like BVN to arrive that the cohort could be more across the nation.