Dumb Money Moves: Why Smart Nigerians Still Make Poor Financial Decisions

By Folalumi Alaran

In a country filled with professionals, graduates, and ambitious entrepreneurs, financial intelligence ought to be a basic life skill.

But in Nigeria, an increasing number of educated citizens continue to make poor financial decisions that drain their savings, push them into debt, and in many cases, plunge them below the poverty line.

Speaking in an interview with our correspondent, a finance expert, Victor Oluwafemi Arowolo said despite holding degrees and occupying white-collar positions, many Nigerians remain vulnerable to fraudulent schemes, get-rich-quick investments, and poor money management.

According to him, a 2012 report by the Central Bank of Nigeria (CBN) and Enhancing Financial Innovation and Access (EFInA) revealed that only 30 percent of Nigerian adults are financially literate, with an even lower percentage among those in paid employment.

He said the figures highlight a critical disconnect between academic education and financial capability.

“I was earning N450,000 monthly, but by the 20th of every month, I was broke and borrowing,” said Biodun, a banking officer in Victoria Island.

“I just never learned how to manage money — not in school, not at home.

“This experience is not isolated. According to the same CBN/EFInA Financial Inclusion Survey, just 26.8 percent of Nigerian adults understand essential financial concepts such as budgeting, interest rates, and inflation. Among university graduates, nearly 40 percent could not accurately explain compound interest, a basic tool in both saving and borrowing, ” he said.

He pointed to a long-standing flaw in the Nigerian education system, where academic achievement is prized but practical life skills like financial management are overlooked.

. “People leave school knowing how to write proposals, but not how to manage a salary.

“The implications of this financial illiteracy are far-reaching. Ngozi Udeh, a chartered accountant and financial education advocate, described it as a silent crisis that surpasses even unemployment in its danger. The unemployed are often aware of their limitations and seek help, but financially illiterate individuals may not realize their mistakes until it is too late, ” he added.

He said findings from SMEDAN in 2012 supported this view, indicating that over 70 percent of small business failures in Nigeria were linked to poor financial planning and mismanagement by their owners.

” The trend has also left many susceptible to scams. Between 2010 and 2012, Lagos State alone recorded losses of up to two billion naira to fraudulent investment schemes, with most victims being educated but financially naïve individuals.

“Regulatory agencies like the CBN and Securities and Exchange Commission (SEC) have made efforts to address the problem through consumer protection and awareness campaigns. However, experts argue that more systemic solutions are needed. They point to the importance of incorporating financial education into school curricula and making personal finance a topic as fundamental as mathematics or English.

“While technology and media offer platforms to promote financial awareness, the challenge remains deeply rooted in cultural and institutional gaps. Many families and communities still shy away from discussions around money, while workplaces rarely offer financial training to staff.”

As Nigeria stands at the threshold of demographic and economic transformation, the absence of financial literacy poses a major threat to sustained growth. With a growing middle class and a youthful population, the country’s economic potential could be undermined if citizens continue to repeat cycles of debt, poor investments, and financial mismanagement.

Financial literacy, Arowolo argued, is more than a personal asset — it is a national necessity. Without it, the promise of economic prosperity will remain out of reach for millions of Nigerians, regardless of how educated they may be.