Nigeria’s latest Consumer Confidence Index (CCI) for the third quarter of 2018 has shown a four point decline to 118, while Ghana’s CCI for the same quarter has risen five points to 113, all in all a fairly stable picture for West Africa, a new report by Nielsen Africa has revealed.
In terms of Nigeria’s performance, Nielsen Sub Saharan Africa MD Bryan Sun noted that, “The combined effects of the slowdown in economic growth, the strain of continued high inflation, and the current political climate with the upcoming elections, have led to a drop in consumer confidence in Nigeria.
“Consumer wallets are currently very stretched, with consumers struggling to make ends meet. The sentiment around minimum wages being too low, has also taken its toll on confidence levels and is being reflected in consumers’ spending habits.”
Nigerian consumers who say now is a good or excellent time to purchase what they need or want has declined to 43% (down from 48% in Q2’18). This declining sentiment is also reflected in their views around job prospects, which has dropped five points, compared to the last quarter, to 56% who view them as excellent or good and 37% who view job prospects as not so good or bad.
Looking at whether Nigerians have spare cash, a majority of 55% said yes, up one point from the previous quarter. In terms of what their spending priorities are once they meet their essential living expenses, the highest number 76% would put their spare cash into savings, followed by 71% on home improvements and 64% investing in stocks and mutual funds.
Growing positivity in Ghana
While Nigeria showed a slight slump in confidence; Ghana’s CCI figure has risen to 113, up from 108. Commenting on the reasons for this Sun says; “A slight respite in inflation and better performance by the industrial and export sector, plus the government’s focus on job creation has led to a slight boost in consumer confidence in Ghana. Given the upturn, consumers have become slightly more open with their wallets and are more willing to spend.
Where the upturn in sentiment is clearly reflected, is within Ghanaian consumers’ immediate-spending intentions, which has increased from 34% in the previous quarter, to 48% who say now is a good or excellent time to purchase what they need or want” reports Sun.
This positive sentiment is also reflected in Ghanaians’ job prospects, which has increased 10 points to 64% who view them as excellent or good and a 10 point decrease to 29% who think their job prospects are not so good or bad. The sentiment around the state of personal finances has taken a slight hit. Ghanaians who think the state of their personal finances would be excellent or good over the next year dropped three points to 76% whereas 18% think that the state of their personal finances is not so good or bad.
A savings mindset
Looking at whether Ghanaians have spare cash to spend, there is an almost even split of 53% between those respondents who said yes versus 47% who said no. Looking at what their spending priorities are once they do have spare cash, the highest number 75% would put it into savings, 74% would invest in stocks and mutual funds and 68% would spend on home improvements. Elaborating on these results, Sun says: “Both Nigeria and Ghana, despite the fluctuation this quarter, fall on the positive side of the consumer confidence spectrum, as reflected by a CCI score of above 100. There’s potential for growth in both countries and with the right investment and focus, they still prove to be promising prospects for the continent.”
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