Rethinking Thrift in an Age of Rising Inflation

Omolabake Fasogbon

In Nigeria’s informal financial ecosystem, thrift savings schemes, popularly known as ajo, esusu, or cooperative contributions, have long served as a lifeline. 

Across markets, offices, churches, and even WhatsApp groups, individuals pool fixed contributions, with each member taking turns to receive a lump sum.

Built on trust and sustained by discipline, the system has endured for generations, however, enabling savings, and not creating growth in actual terms. 

A thrift payout reflects months of financial discipline, while spending it returns individual tobacco starting point. But setting aside a portion for investment gives money a chance to multiply.

An economist, Jide Ojo noted that thrift systems encourage financial prudence and discipline by helping people set money aside rather than spend all they earn. On the other hand, investing such funds attract interest. 

The Nigerian stock market remains one of the viable platforms for generating such returns. Data from the Nigerian Exchange Limited shows strong double-digit growth in recent periods, reinforcing equities’ role in wealth creation.

 Although market performance fluctuates, broader trend highlights the advantage of investing over holding cash. 

Capital markets expert, Yinka Edu while at a money fair conference in Lagos, recently advised that thrift can be taken a step further by converting it into a wealth-building tool.

 “A practical approach is to divide it, use part for immediate needs and commit the rest to investment,” she explained.

According to her, this approach allows participants meet financial obligations while building for the future, noting that even modest, consistent allocations can compound over time.

 “Your money in the thrift is basically not growing. You’re just collecting. It’s a savings mechanism, but it’s not growing,” she stressed.

For many, access to the stock market remains constrained by fear and limited understanding. But Group Chief Strategy Officer of the Nigerian Exchange Group, Jumoke Olaniyan maintained the platform is open to all, irrespective of financial class.

She pointed to improvements in digital banking and investment infrastructure as key enablers. “The digital banking system has become central to how people operate. Many transactions now happen on mobile phones. This is enabling access for more Nigerians in formal financial systems as well as making investing more seamless,” she said.

Olaniyan added that access on the platform has also been matched with financial literacy, noting uninformed investors are more likely to make short-term, reactive decisions that could erode returns and increase market volatility.

She cited investor clinics, targeted workshops and the NGX Academy as initiatives aimed at bridging identified gaps.

With about 70 per cent of Nigeria’s market traders operating in the informal micro-enterprise space, according to the International Finance Corporation ( IFC), analysts note these women already demonstrate the discipline required for equity investment, including consistency, patience and collective accountability. 

Left is connecting these habits to opportunities that can deliver stronger returns.

Group Managing Director and Chief Executive Officer of the Nigerian Exchange Group, Temi Popoola, described the capital market as a hub of resilience and innovation, noting that inflationary pressures have made equities an effective hedge.

While the thrift system has been age-long, its output lags today’s inflation‑driven economy, which expert advised a shift from mere fund rotation to strategic reinvestment.