Nigeria’s Sachet Economy

Afolabi Great
5 min readJun 22, 2021

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The simple rule of the sachet economy is “survive or die”, both for consumers and businesses. For the purpose of this article, sachets are a packaging method used to sell commodities at a lower quantity or a size that’s smaller than the original. Individuals have several reasons for buying sachets, it could be because the original is more than they need but more often, it’s because they cannot afford the original. Unfortunately, buying items in larger sizes or in bulk is always a better deal than buying its’ sachet, most especially for the consumer. This can easily be confirmed by comparing any product’s sachet and original, divide their weights, multiply it by the sachet’s price and most probably you’ll feel ripped off if you are a sachet customer.

From the manufacturer’s perspective, they are doing the public a favour by making their product available to the masses at their pocket’s size. However it’s incorrect to describe it as a “favour” as it’s unlikely they’ll break-even if a significant amount of the population cannot afford their product. These interactions between producers and consumers are what constitute the sachet economy. Summarily, a majority of the consumer population do not have enough purchasing power to buy a good at the size or quantity that provides maximum utility, or at enough units for the producer to break even, hence they are forced to produce the good at smaller sizes.

While certain industries may produce sachets to widen their profit margin rather than break even, my article is focused on survival. In today’s Nigeria without a single positive economic index, producers have to cut their cloth according to the consumer’s size. The sachet economy is simply an indication of increasing poverty, worsening inflation and Nigerians’ ability to adapt to the harshest conditions. The sachet economy isn’t only about products sold in sachets, it pervades every industry. In the drinks industry, it presents itself as smaller bottles. An example are the “solo” bottles, little juice boxes and the recent re-entry of Caprisonne & its’ comrades into the market. “Mini” and “Jumbo” packages have also become the new fashion in restaurant lines to allow their customers eat smaller portions at affordable prices. Even our dearest sharwamas haven’t been spared, mini-sharwamas are fast becoming popular at food stands.

Some argue that the sachet economy is about innovation and while I don’t wholly disagree, it is more about inflation and poverty. President Buhari claims to have lifted 10 million Nigerians out of poverty highlighting Tradermoni, Farmermoni, etc., which are at best money-dispensing schemes. What the presidency seems to be oblivious of are basic economic laws that forbid excess circulation of money without any creation of value. Halting the provision of forex for food importation when we aren’t producing enough locally is another testament to the foolhardiness of Buharinomics. Hence, there is scarcity and increased price of items with “useless money” in the hands of Nigerians and as a reaction by the market, we have the sachet economy.

With the continuance of these policies, the sachet economy is here to stay. In this economy, manufacturers get the worst part of the deal having to deal with the cost of production, packaging and bottlenecks before it arrives to the consumer. However, packaging companies, printing industries and retailers get a better deal and are more likely to flourish in this economy. Waste management companies may also benefit from this situation as disposal rates will be accelerated. Service providers too may consider rendering their services in smaller bits at higher rates as compared to the full package.

Unfortunately, the largest burden of the sachet economy rests on the consumer who needs a daily and regular income to get by. This may mean taking up multiple jobs (in a country where there are little jobs) or involving more members of their household in bread-winning, I’m talking about child labour. Inadvertently many will turn to crime.

“A sachet per day makes everyone work all day"

The sachet economy is an emergency that the government must take with all seriousness. The first step to solving this problem is for the government to be honest with itself and realize its' failings, without which there can be no restitution. If they continue to deny the current reality and lavish themselves with praises, they will continue with their destructive policies. They must encourage manufacturing of goods that are internationally competitive, rather than locking our borders and creating monopolies. This can be done by providing tax rebates to strategic industries and liberal legislation that permits more players into these markets.

The government must also stop it’s money-sharing and instead provide hubs where the intended recipients can provide value an earn a means of living from it. An example is “Skilcraft" in the USA, a company where blind men produce pens for US Federal offices. Needless to say, jobs are the only way to take people out of poverty not handouts.

But before the government listens, get money smart. You can beat inflation by

  • Saving in more stable foreign currencies
  • Investing in stocks, local and foreign
  • Investing in real estate

Fintechs including Trove, Bamboo, Risevest, Cowrywise, Piggyvest and etc. all provide investment options that you can take to get ahead. Paying more attention to the economy may also do you well.

When this government came in 2015, the Naira was trading to the dollar at around 200 naira. In 2021, it’s trading around 500 naira, an approximate 150% increase. It tells you that there’s no depth our economy can’t sink to. Businesses are simply trying to survive by floating their sachets, while consumers are wearing them as life jackets, also to survive. The rule of the sachet economy is “survive or die", what are you doing to survive?

Thanks for reading and don’t forget to clap👏🏿

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Afolabi Great

I'm a medical doctor and student of my environment who likes to analyze and think of disruptive concepts. I write about Government, Economics and History.