Nigerian Consumers Expect Rise in Inflation, Naira—CBN Survey
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has released its Consumer Expectations Survey (CES) for the third quarter (Q3) of 2019. In the report analysed by Business Post, it was discovered that consumers have a positive outlook for the next 12 months.
The survey also showed that most respondents expect the Naira to appreciate within the period as well as a possible increase in the nation’s inflation rate. But they expect the borrowing rate to fall.
The survey, according to the apex bank, was conducted during the between September 16 – 27, and covered a sample size of 2,070 households drawn from 207 Enumeration Areas (EAs) across Nigeria, with a response rate of 98.3 percent.
It was discovered that consumers’ overall confidence outlook rose in the quarter under review, and this was attributed to more consumers showing optimism in their positive outlook rose to 22.8 and 31.5 points, respectively. The index rose to 3.8 points indicating 2.3 points increase from the index in the corresponding period of 2018.
Respondents also expect that prices of goods and services will rise in the next 12 months, with an index of 25.0 points driven by purchase of appliances/ consumer durables, savings, education, purchase of car/motor vehicle, purchase of house and transportation.
The unemployment index for the next 12 months also remained positive at 21.8 points in the reviewed quarter, this means that consumers generally expect the unemployment rate to rise in the next one year.
Looking at the country’s Borrowing and Exchange Rate Outlook which are put at -6.2 and 13.9 points respectively, it was shown that consumers hope the borrowing rate will reduce and were hopeful for the local currency to appreciate in the next one year.
When asked about the ideal time to buy big ticket items such as consumer durables, motor vehicles, houses among others, majority of respondents indicated that the current quarter was not ideal to purchase, as it stood at 30.3 points.
Also, looking at the next 12 months, Overall buying intention index was pegged at 36.2 index points, this also indicated that most consumers do not intend to buy big ticket items in the next one year.
An index above 50 means more respondents indicated that it is a good time to buy assets; below 50 means more respondents believe that it would not be an appropriate time to make those purchases; and 50 means the number of respondents on both sides is equal.
Looking at the sampled population, Respondents’ distribution by educational attainment showed that 7.3 percent had university education, 11.7 per cent had higher non-university education, while 27.8 per cent had senior secondary school education.
Respondents with junior secondary and primary school education accounted for 5.0 and 19.3 percent, respectively, while those with no formal education accounted for the balance of 28.9 percent.