Nigerian consumers’ confidence still very low despite economic recovery

Sentiments around job prospects have helped improve Nigeria’s consumer confidence to spend in 2018, however, Nigerians are still concerned about their personal finances due to limited disposable income, leading to a conservative outlook on spending for first two quarters of 2018.

This is according to the latest Nielsen Africa Prospects Indicator (APi), which integrates macro-economic, business, retail and consumer factors.

The survey which measures customer’s degree of optimism about the overall state of the economy and personal financial conditions since 2013, shows while Consumer Confidence Index (CCI) in Ghana points to a higher proportion of “Excellent” and “Good” responses to the question of how Ghanaians perceive the state of their personal finances in the next 12 months, which now stands at 78percent the highest level since quarter 2, 2015 the index shows only 40 percent still cannot afford their basic needs.

The report indicates a result of ongoing price pressure, on food which has doubled to 19 percent over the past two years, forcing Nigerians to pay more for less for their basket mix and dropping indulgences from their repertoire.

The report revealed that a good percentage of Nigerians are now focusing on cheaper brands, while others are looking for further efficiencies by buying less.

In light of this, the percentage of Nigerian respondents who said that their personal finances will be good or excellent in the next 12 months dropped five percentage points to 75percent, down to the same level as the corresponding quarter in 2016.

On the plus side, 62 percent of Nigerian respondents now say their job prospects will be good or excellent, up three percentage points from Quarter 4, 2016, however immediate-spending intentions remained the same at 39 percent while more than four in 10 Nigerians said they had disposable cash.

In terms of what they would use this spare cash for, the highest number of Nigerians are seeking to batten down the hatches on their current financial future, with 76percent saying they would put it into savings. The second highest number (69percent) want to use their spare cash on home improvements and decorating and 65percent on investing in shares and mutual funds. Unsurprisingly, 54percent would spend it on out of home entertainment as they seek some respite from their current daily stresses and strains.

Furthermore, only 45 percent of Nigerians indicates they have spare cash compared to 58 percent of Ghanaian respondents who indicate they have spare cash an increase of 9 percentage points from Quarter 4, 2016.

In terms of what they would use this spare cash for, the highest number of Nigerians are seeking to batten down the hatches on their current financial future, with 76 percent saying they would put it into savings.

The second highest number 69 percent want to use their spare cash on home improvements and decorating and 65percent on investing in shares and mutual funds. Unsurprisingly, 54 percent would spend it on out of home entertainment as they seek some respite from their current daily stresses and strains.

Speaking on the report Nelson Gupta said “Nigeria has faced turbulent times in the last two years. The drop-in oil prices coupled with exchange rate volatility severely affected the economy, leading to recessionary trends from mid-2016, and rapidly rising inflation.

“As exchange rates attained stability, the economy has gradually started to recover. The consumer sentiment shows marginal recovery from the low point in Q4 2016. With improving job and financial stability, and inflationary relief, we expect recoveries in sentiment and consumption,” he added.

DAVID IBEMERE