By Godstime Joseph Asukwo
Abstract
This paper examines the devastating impact of hyperinflation on low-income earners in Nigeria, where the Nigerian Naira has plummeted to a record low of 1,600 Naira to 1 US dollar. By analyzing Savecoins Technologies Inc.’s efforts to offer a platform for hedging savings in USDT, a stablecoin, this paper evaluates the effectiveness of such a product for this vulnerable demographic. It offers a comprehensive, data-driven analysis of the challenges and opportunities, along with actionable recommendations for how we, at Savecoins, can build sustainable, long-term solutions to help Nigerians secure their financial future amidst economic instability.
Introduction
The Nigerian economy has been ensnared in a relentless cycle of hyperinflation for several years, pushing the country into a state of unprecedented economic crisis. The official exchange rate of the Naira against the US dollar, once a manageable 300 Naira to 1 USD in 2021, has skyrocketed to a staggering 1,600 Naira to 1 USD in 2024. This hyperinflationary crisis has disproportionately impacted low-income earners, severely eroding their purchasing power and making it increasingly difficult to afford basic necessities.
The impact on low-income Nigerians is far more than just a matter of numbers. It’s about families struggling to feed their children, facing agonizing choices between healthcare and rent, and losing hope for a brighter future. In 2021, a family with an income of 50,000 Naira could live comfortably. Today, that same family faces a stark reality – they might only be able to purchase 1/3rd of what they could back then. This is a crisis of purchasing power, and it’s impacting millions of Nigerians.
Here is a concrete example of how prices have skyrocketed in recent years, based on real-time data:
Table 1: Inflation Impact on Essential Goods (2021 vs. 2024)
| ITEM | 2021 PRICE (NGN) | 2024 PRICE (NGN) | INCREASE (%) |
| 50kg Bag of Rice | 20,000 | 75,000 | 275% |
| 1 Liter of Petrol | 165 | 1,300 | 685% |
| Transportation (Bus Fare) | 100 | 500 | 400% |
| Basic Healthcare Consultation | 2,000 | 4,500 | 125% |
| Monthly Rent (1 Room Apartment) | 5,000 | 12,000 | 140% |
| 1 Crate of Eggs | 500 | 8,000 | 1500% |
| Monthly Electricity Bill | 3,000 | 7,000 | 133% |
| 1kg of Beef | 1,500 | 3,800 | 153% |
These numbers paint a stark picture of the financial hardship faced by low-income Nigerians. A family that could afford a decent basket of food, transportation, and basic healthcare in 2021 is now struggling to meet even those essential needs.
The Impact on Low-Income Households
Consider a family with a monthly income of 100,000 Naira, a common income level for many low-income households in Nigeria. In 2021, this family could have allocated their income as follows:
Table 2: Hypothetical Family Budget (2021)
| EXPENSE CATEGORY | 2021 BUDGET (NGN) | PERCENTAGE OF INCOME |
| Food | 30,000 | 30% |
| Rent | 15,000 | 15% |
| Transportation | 10,000 | 10% |
| Education | 10,000 | 10% |
| Healthcare | 5,000 | 5% |
| Utilities | 10,000 | 10% |
| Savings | 20,000 | 20% |
Now, in 2024, due to hyperinflation, this same family faces a drastically different reality:
Table 3: Hypothetical Family Budget (2024)
| EXPENSE CATEGORY | 2024 BUDGET (NGN) | PERCENTAGE OF INCOME |
| Food | 50,000 | 50% |
| Rent | 25,000 | 25% |
| Transportation | 10,000 | 10% |
| Education | 15,000 | 15% |
| Healthcare | 10,000 | 10% |
| Utilities | 15,000 | 15% |
| Savings | -25,000 (Deficit) | -25% |
This hypothetical family is now forced to allocate almost all of their income to basic necessities, leaving them with a substantial deficit and no room for savings. This scenario is a stark reality for millions of low-income earners in Nigeria, highlighting the urgent need for solutions to combat hyperinflation and protect their financial well-being.
Understanding the Target Audience
Low-income earners in Nigeria are particularly vulnerable to the effects of hyperinflation. They often lack access to traditional financial instruments, including bank accounts, which can help to mitigate the effects of inflation. They rely heavily on cash and informal savings mechanisms, making them highly susceptible to the rapid erosion of purchasing power.
USDT: A Potential Hedge Against Inflation
USDT, a stablecoin pegged to the US dollar, offers a potential solution to this problem. By pegging its value to the US dollar, USDT provides a stable store of value, shielding its holders from the volatility of local currencies. This makes it an attractive alternative for those looking to preserve their savings in a hyperinflationary environment.
Savecoins: Bridging the Gap
We, at Savecoins, recognize the urgent need for accessible and secure financial solutions for low-income earners. Our platform is designed to empower this vulnerable demographic by offering a simple and user-friendly way to convert part of their Naira savings into USDT, effectively hedging against the devastating effects of inflation.
The Savecoins Advantage
Savecoins utilizes a decentralized and secure blockchain-based system, offering a secure and transparent platform for managing digital assets. We are constantly working to improve user experience and provide the following features:
Ease of Use: We have designed our platform to be intuitive and user-friendly, even for those with limited digital literacy.
Accessibility: Users can access our platform on their mobile devices or through a web browser, making it easily accessible to a wider audience.
Security: We prioritize the security of user funds, implementing robust security measures to protect against fraud and cyberattacks.
Transparency: We are committed to transparency in all our operations, providing users with clear information about their transactions and account activity.
Case Study: The Adegoke Family
Let’s consider the Adegoke family, living in Lagos with a monthly income of 100,000 Naira. In 2021, they were able to save 20,000 Naira per month, as seen in Table 2. However, in 2025, as shown in Table 3, their savings have been completely wiped out due to hyperinflation, leaving them with a deficit of 25,000 Naira.
If the Adegoke family had used Savecoins to save a portion of their savings in USDT since 2021, their situation would be drastically different.
Let’s assume they saved 10,000 Naira into USDT every month starting in 2021.
Due to a significant increase in the USD to NGN exchange rate of 347.37% from 2021 to 2025, those 10,000 Naira saved each month in USDT would be worth about 44,737 Naira each by 2024.
By 2024, the Adegoke family would have accumulated about 2,147,712 Naira worth of USDT. At the 2024 market value, this is approximately 2,147,712 Naira more than their current savings situation, representing a substantial increase in purchasing power due to the dramatic change in exchange rates.
This example illustrates how Savecoins could have helped the Adegoke family preserve their purchasing power and avoid a substantial financial deficit.
The Impact of Hyperinflation: A Predictive Analysis
The hyperinflationary environment is projected to continue, further eroding the value of the Naira. This trend has far-reaching implications for low-income Nigerians, potentially exacerbating existing financial vulnerabilities and pushing many into deeper poverty.
By utilizing predictive analysis, we can model the potential impact of Savecoins on low-income earners over the next few years:
Scenario 1: No Action Taken
Without adopting solutions like Savecoins, the purchasing power of low-income earners will continue to decline at an alarming rate.
The gap between income and expenses will widen, forcing families to make increasingly difficult choices and further restricting their ability to save.
This scenario could lead to a significant increase in poverty and social unrest, as individuals struggle to meet basic needs.
Scenario 2: Savecoins Adoption
With increased adoption of Savecoins, a substantial portion of low-income earners will have access to a stable store of value, enabling them to protect their savings from inflation.
This could lead to greater financial security, improved access to essential goods and services, and a reduction in poverty.
The long-term economic impact could be significant, fostering a more resilient and equitable economy.
Building a Sustainable Future
For Savecoins to make a lasting impact on the lives of low-income Nigerians, we are building a sustainable model that addresses the unique challenges they face. Here’s how we are doing that:
Bridging the Digital Divide: We invest in initiatives to enhance digital literacy and access to smartphones in low-income communities. This includes partnering with local NGOs and educational institutions to offer training programs, providing subsidized access to mobile devices, and creating user-friendly mobile applications that simplify the user experience. We are exploring partnerships with mobile operators to offer affordable data plans and smartphone subsidies to target users.
Building Trust and Partnerships: We will strengthen our relationships with local banks, mobile operators, and government agencies. These partnerships will help us reach a wider audience, build trust among potential users, and integrate our services into existing financial ecosystems. We are also actively engaging with community leaders and local influencers to build awareness and encourage adoption.
Continuous Improvement: We will continually evolve our platform, introducing features and functionalities that meet the specific needs of low-income users. This includes:
Simplified User Interfaces: We will focus on developing intuitive and user-friendly mobile applications that cater to the needs of users with limited digital literacy.
Educational Content: We will create educational resources and campaigns that demystify financial concepts and help users understand the benefits of using stablecoins like USDT.
Risk Management Tools: We will offer tools and resources to help users mitigate potential risks associated with volatility in the cryptocurrency market.
Conclusion
Hyperinflation in Nigeria presents a grave threat to the financial well-being of low-income earners. We, at Savecoins, are committed to empowering this vulnerable demographic with the tools they need to navigate this challenging economic environment. By providing a stable and accessible way to hedge against inflation, we aim to contribute to greater financial security, enabling individuals to save for their futures and build a more resilient economy.
Success depends on addressing the remaining challenges, building robust partnerships, and continually improving our platform and services. As Nigeria continues to grapple with hyperinflation, Savecoins has the potential to become a vital tool for financial inclusion and empowerment, transforming the lives of millions of Nigerians.