It's no secret that sub-Saharan Africa has been through a tumultuous few years with fluctuating commodity prices and resulting market uncertainty, so it's no surprise that the latest Nielsen Consumer Confidence Index (CCI) for Q1, 2018 for West Africa (Nigeria & Ghana) reflects a left over mixed bag of sentiment, associated with lingering uncertainty.
Looking at the current sentiment Nielsen West Africa & Maghreb MD Abhik Gupta explains; “There was expectation that the situation would improve after Quarter 4 with the fundamentals looking up i.e. more cash/ forex injection by the Central Bank and higher oil prices, however, the improvement is still not evident in the market.
“Consumer purchasing power is slow as the upturn in economy is not being felt at the consumer level. There has also been no change in inflation levels or employment conditions. So, while the worst may be over, and the economy seems to have bottomed out, the improvement is still not evident.”
A thirst for jobs
In terms of their employment prospects over the next 12-months Ghanaians sentiment has deteriorated slightly by four points to 65% who see their job prospects as positive. Nigeria has experienced an even greater drop of nine points to 56%. This, however, has had only a small effect on Nigerians view of their personal finances with 78% (down from 84%) saying their personal finances will be good or excellent in the next 12-months. In contrast, and despite their declining job outlook, 86% (a 7% point increase) of Ghanaians are feeling positive about their personal finances in the next 12-months.
Ghanaians immediate spending intentions therefore unsurprisingly is holding steady with 48% saying now is the time to buy the things they need and want, whereas this figure has declined by five points to 38% of Nigerians feeling the same. Both countries have, however, seen a marked decline in the number of respondents saying they have spare cash, namely a nine percent drop in Ghana to 47% and the same level of decline in Nigeria to 45%.
Due to the cash strapped nature of their lives and the looming uncertainty, 80% of Ghanaians remain committed to a savings regime, 67% aim to invest in shares and mutual funds and 68% are determined to preserve the value of one of their biggest assets their home. Nigerians hold a similar predisposition towards saving (84%) and home improvements (76%) but 68% rank buying new clothes as their preferred option for the use of spare cash.
Looking ahead Gupta comments; “While Nigeria is experiencing dampened sentiments, consumer sentiment in Ghana is on a high even though there has been no change in index levels since the previous quarter. Inflation rate is down and is expected to further moderate this year, leading to increase in consumer demand and higher purchasing power.”
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