Financial illiteracy is worsening the economic difficulties confronting many Nigerians by leaving individuals and families poorly equipped to manage inflation, unemployment, rising living costs and unexpected financial emergencies.
This was the key message at Jawdi Stack Workshop, a financial literacy training organised by Jawdi Ltd in Abuja.
The convener and founder of Jawdi Ltd, Fatima Sanusi, said financial illiteracy was not simply a problem of inadequate income but also a lack of knowledge, skills and confidence needed to make informed decisions about earning, spending, saving, borrowing and investing.
Sanusi, a finance, portfolio management consultant and educator, said the consequences were particularly severe for low- and middle-income households with limited financial reserves.
She explained that a salaried worker without a budget, emergency savings or clearly defined financial goals could easily become trapped in a cycle of borrowing whenever unexpected expenses arose.
“Before the next salary arrives, unexpected expenses force them to borrow. They then spend the following month repaying the debt, only to borrow again when another emergency arises. Over time, this becomes a cycle that is difficult to break,” she said.
Sanusi said such circumstances should not necessarily be interpreted as financial irresponsibility, noting that many people had simply never received practical education on how to manage money.
She therefore called for financial literacy to be treated as an essential life skill rather than something reserved for wealthy people.
According to her, one of the major consequences of poor financial literacy is weak financial decision-making, stressing that earning more money does not automatically translate into financial security.
She said salary increases could quickly disappear through lifestyle inflation when individuals increased their spending without improving their savings, investments or long-term financial plans.
“Without basic financial knowledge, a salary increase can quickly disappear into lifestyle inflation,” she said.
The consultant also cautioned Nigerians against taking loans without understanding their repayment obligations, investing solely on the recommendations of friends or committing their savings to schemes that promise unusually high returns.
She noted that although Nigeria’s expanding digital economy had made financial information more accessible, access to information did not necessarily amount to financial literacy.
