A new report by Nielsen Africa has revealed that the Consumer Confidence Index (CCI) of Nigeria has dropped five points to 112, while that of Ghana went down by four points to 114 in the third quarter of 2019 from 118 in the previous quarter.
In a statement made available to Business Post, it was stated that these two sets of results present a fairly stable, albeit a slightly less positive picture of consumer sentiment across West Africa compared to the previous quarter.
“Nigerians are experiencing a subdued confidence level considering that inflation has started to rise again and the proposed VAT increase bill, which is making people cautious.
“Furthermore, the rising sovereign debt and the anxiety around further Naira devaluation, continued to impact consumer sentiment in Nigeria in the third quarter,” Managing Director of Nielsen for Nigeria, Mr Ged Nooy, was quoted as saying.
Looking at the consumer picture, Nigerians immediate-spending intentions has shown a large decline; with only 41 percent of consumers (versus 54 percent in the previous quarter) saying now is a good or excellent time to purchase what they want or need. Their perception around job prospects has also declined, with 55 percent viewing them as excellent or good, a five-point drop from the previous quarter.
In addition, sentiment around the state of personal finances has also shown a decline, with 76 percent Nigerians agreeing their state of personal finances will be excellent or good over the next year, a six-point drop from the previous quarter.
Looking at whether Nigerians have spare cash to spend, 47 percent said yes, versus 51 percent in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, 76 percent would invest in home improvements/decorating, 72 percent would put their spare cash into savings and 62 percent say they will invest in shares/mutual funds.
Looking at the top concerns for Nigerians over the next six months, work/life balance tops the list with 28 percent, a one-point increase compared to the previous quarter. This is followed by concerns around increasing food prices at 22 percent (the same as Q2’19) and tolerance towards different religions (19 percent) superseding the economy, which is now at 16 percent, a four-point decrease compared to the previous quarter.
Elaborating on these results, Mr Nooy stated that, “Nigerian consumer sentiment dropped this quarter, however, it is still quite high compared to the cut off of 100, where anything above 100 reflects a positive consumer confidence. The key for marketers and retailers is to understand these fluctuating consumer sentiments and quickly adapt to the consumer’s needs.”
Looking at Ghana’s overall performance, Nielsen Market Lead for West Africa, Yannick Nkembe, noted that, “The initial optimism experienced at the beginning of the year is waning in Ghana owing to the concerns around the economy. Though inflation levels dropped, these have not shown a meaningful impact at the ground level and Ghanaians continue to feel the pressure. Consumers have become cautious of spending as they are not certain of future prospects.”
This more subdued outlook is reflected by Ghanaian consumers’ curtailed view of their job prospects, with a substantial 12-point decrease to 51 percent saying job prospects will be excellent or good in the next 12 months. In terms of the state of their personal finances over the next 12 months, 72 percent say they are excellent or good, down from 74 percent in the last quarter. The number of Ghanaian consumers who feel now is a good or excellent time to purchase the things they need or want, has also seen an inconsequential drop quarter on quarter, from 46 percent to 45 percent.
Looking at whether Ghanaians have spare cash, only 42 percent say yes, down a substantial 10 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (82 percent) still say they will put their spare cash into savings, followed by 66 percent on home improvements/decorating and 59 percent who will invest in stocks and mutual funds.
When looking at the factors that are having a negative impact on Ghanaians outlook, the top concerns over the next six months are increasing food prices (26 percent) followed by work/life balance at 22 percent, the economy and tolerance towards different religions, both at 18 percent, and job security coming in fourth at 16 percent.
In light of their outlook, more than three quarters (72 percent) of Ghanaians have changed their spending to save on household expenses compared to the same time in the previous year.
The top three actions they have taken to save money are delaying the replacement of major household items (55 percent), looking for better deals on loans/insurance/credit cards (54 percent) and spending less on new clothes (53 percent).
