Economy
Naira Stability Buoys Nigeria’s Consumer Confidence Index in Q2—Report
By Dipo Olowookere
A new report released by South Africa-based Nielsen Africa has revealed Nigeria’s Consumer Confidence Index (CCI) for the second quarter of 2018 recorded a very healthy increase of nine points to 122, while Ghana’s CCI for the same quarter dropped 12 points to 108.
In an emailed statement to Business Post, Nielsen Africa noted that in terms of Nigeria’s performance, its Sub Saharan Africa chief, Mr Bryan Sun, submitted that, “The stability of forex rates and a steady Naira has led to stable retail prices of most manufactured goods and imported staples, resulting in a recovery in confidence levels in Nigeria. The improvements seen in the economic environment are reflected in the overall enhanced sentiment, with 83% of Nigerians describing the state of their personal finances over the next year as excellent or good.”
He stated further that this has resulted in a more positive outlook in terms of Nigerian consumers immediate-spending intentions, which has risen to 48% (up from 38% in Q1) who say now is a good or excellent time to purchase what they need or want.
This increasingly positive sentiment is also reflected in their job prospects, with 67% viewing them as excellent or good (up from 56% in Q1’18) and 29% as not so good or bad.
More cash, more spend
Looking at whether Nigerians have spare cash, a majority of 54% said yes, up nine points from the previous quarter, while 46% said no. Looking at what their spending priorities are once they do have spare cash, the highest number 86% would put it in savings followed by 82% on home improvements, 72% on new clothes and 67% would use their spare cash for both out of home entertainment and investing in shares and mutual funds.
When asked about the changes in their spending to save on household expenses, compared to this time last year, 80% of Nigerians agreed that they have changed their spending habits.
In terms of the actions they took to save money last year, the highest number (66%) said they spent less on at home entertainment, followed by 57% who took less holidays, 42% who spent less on new clothes and 39% who delayed the replacement of major household items.
Some of the major concerns driving this more cautionary mindset include 19% who think economy is their biggest concern over the next six months, whereas 12% consider food prices and 11% said work/ life balance is their biggest concern. When asked what their second biggest concern would be over the next six months, 19% said food prices, 13% said work/life balance and 12% mentioned job security.
Growing uncertainty in Ghana
From a stable confidence level in Q1’18, Ghana dropped 12 points this quarter to 108, the lowest since quarter 3, 2016.
Mr Sun comments; “Though consumer confidence in Ghana has declined in Q2’18, it still leans on the positive side, 100 being the neutral point on the index. The declining economic growth in Ghana, subdued performance in the non-oil and industrial sector, and poor agricultural performance has led to declining confidence levels this quarter.”
He adds that this uncertain sentiment is reflected by the six point drop in Ghanaians, down to 79%, who describe the state of their personal finances over the next year as excellent or good, and 17% (increase of 10% from Q1’18) who say that state of their personal finances is “not so good” or “bad”.
“It’s therefore no surprise that Ghanaian consumers’ immediate-spending intentions have declined, with only 35% of respondents (down from 48% in Q1’18) who say now is a good or excellent time to purchase what they need or want, versus the 61% who said it was not,” reports Mr Sun.
This declining sentiment is also reflected in Ghanaians’ job prospects, which has dropped 11 points to 54% who view them as excellent or good and a 10 point rise to 39% who think their job prospects are not so good or bad compared to the previous quarter.
Disposable income
Looking at whether Ghanaians have spare cash to spend, there was an even 50/50 split between those respondents who said yes and no. Looking at what their spending priorities are once they do have spare cash, the highest number 78% would spend it on home improvements, 77% would put it into savings and 61% would spend on new clothes.
When asked about the changes in their spending to save on household expenses, compared to this time last year, 61% of Ghanaians agreed that they have changed their spending habits. In terms of the actions they took to save money last year, the highest number (49%) said they spent less on at home entertainment, followed by 48% who took less holidays, 32% who delayed the replacement of major household items and 31% who spent less of new clothes.
The factors driving this more cautionary mindset are embodied in Ghanaians biggest and second biggest concerns over the next six months. The highest number of respondents (14%) said health is their biggest concern, followed by work/life balance (13%), and food prices and the economy (both at 12%).
When asked about their second biggest concern over the next six months, 16% of respondents said work/life balance, 12% said their kids’ education/welfare, and food prices and higher fuel prices both recorded 11%.
Elaborating on these results, Sun says: “Despite the decline in confidence levels, Ghana’s outlook is still positive. A strong domestic demand and favourable performance on oil, cocoa, and gold, coupled with ongoing investment in the country, gives hope for a brighter second half in 2018 for the country, resulting in a revival of consumer sentiments and spend”.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
By Adedapo Adesanya
The Naira opened the week on a positive note, as it appreciated against the US Dollar by N3.39 or 0.25 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, August 3, to N1,364.83/$1 from N1,368.22/$1 last Friday.
However, it suffered a marginal decline against the Pound Sterling in the official market during the session by 10 Kobo to close at N1,837.89/£1 compared with the preceding session’s N1,837.79/£1, and lost 6 Kobo on the Euro to sell at N1,573.93/€1, in contrast to the previous trading day’s N1,573.87/€1.
At the black market segment, the Nigerian currency traded flat against the Dollar yesterday at N1,405/$1, and at the GTBank forex counter, it was unchanged at N1,374/$1.
Interbank FX transactions increased sharply as market makers’ activities raised total Dollar volume exchanged to $137.048 million, more than 132 per cent above $58.990 million in turnover at the previous close. The surge in turnover was driven by increased deals at the NFEM window. The central bank reported that deal count at the interbank FX window rose to 138 from 67 on Friday.
As for the cryptocurrency market, major tokens advanced despite ongoing uncertainty around unresolved Coldcard wallet sweeps that have drained hundreds of Bitcoin (BTC), while traders are watching whether bitcoin can hold above $63,000 through the US session. BTC rose by 1.70 per cent to $63,765.88.
Bitcoin treasury firm Strategy disclosed Monday it sold 1,638 bitcoin for about $105 million between July 27 and Aug. 2, its third sale of 2026, per an SEC filing.
Also, an attacker has moved about 1,816 bitcoins, or roughly $114 million, from more than 5,200 addresses since July 30 in a fourth wave of sweeps targeting BTC in Coldcard-generated addresses.
Cardano (ADA) appreciated by 6.7 per cent to $0.1959, Binance Coin (BNB) gained 1.5 per cent to sell for $590.82, Solana (SOL) jumped by 1.3 per cent to $73.72, TRON (TRX) soared by 0.9 per cent to $0.3286, Dogecoin (DOGE) also grew by 0.9 per cent to $0.0703, Ripple (XRP) advanced by 0.5 per cent to $1.07, and Ethereum (ETH) rose by 0.4 per cent to $1,863.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
