The release of Nielsen’s latest Consumer Confidence Index figures for Quarter 3, 2017 has been marked by small increases and a relatively stable performance in both Ghana and Nigeria, with the latter climbing one point to 117, while Ghana’s score rose one point to 112.
“Consumer confidence in Ghana is highest since the inception of this survey in 2013. Recovery in the oil and gas sector, healthier agricultural production, and favourable monetary policies, have all contributed towards re-establishing positive sentiment among Ghanaians. Improving sentiments around employment prospects, personal finances and spare cash, will translate into larger and more favourable outcomes in consumption, with the consumer more willing and able to try and buy new products,” comments Abhik Gupta, Nielsen West Africa and Maghreb Managing Director.
Ghana feels good
The overall increase in Ghana’s latest Consumer Confidence Index (CCI) figures, was due to a higher proportion of “Excellent” and “Good” responses to the question of how Ghanaians perceive the state of their personal finances in the next 12 months, which now stands at 78% the highest level since quarter 2, 2015.
Ghanaians immediate spending intentions are also positive, with 43% stating that now is a good time to buy the things they need and want. There is also increasingly positive sentiment towards their job prospects over the next 12-months with 60% (up from 55%) saying the prospects are Excellent or Good.
In addition, there has been an upswing in the number of Ghanaian respondents who indicate they have spare cash (58%); an increase of 9 percentage points from Quarter 4, 2016; in comparison this proportion of consumers is substantially higher than Nigerians (45%) and Kenyans (34%).
In terms of what they would use this spare cash for, Ghanaians remain financially conservative in their outlook, with the highest number (80%) saying they would put it into savings, the second highest number of respondents (56%) say they would invest in shares/mutual funds while 53% see home improvements as a worthwhile investment.
Fair to middling
In contrast, consumer confidence in Nigeria is subdued. Sentiments around job prospects are improving. However, Nigerians are still concerned about their personal finances and have limited spare cash, leading to a conservative outlook on spending.
According to the latest Nielsen Africa Prospects Indicator (APi), which integrates macro-economic, business, retail and consumer factors, revealed that Nigerians are experiencing ongoing price pressure with only 60% of Nigerians being able to afford the basics.
With food inflation doubling to 19% over the past two years, Nigerians faced with paying “more for less”, are changing their basket mix and dropping indulgences from their repertoire. They are also looking for further efficiencies by buying less overall (27%), buying in bulk (23%), and switching to cheaper brands (17%).
In light of this, the percentage of Nigerian respondents who said that their personal finances will be good or excellent in the next 12 months dropped five percentage points to 75%, down to the same level as the corresponding quarter in 2016. On the plus side, 62% of Nigerian respondents now say their job prospects will be good or excellent, up three percentage points from Quarter 4, 2016.
Immediate-spending intentions remained the same at 39% while more than four in 10 Nigerian respondents (45%) said they had spare cash.
In terms of what they would use this spare cash for, the highest number of Nigerians are seeking to batten down the hatches on their current financial future, with 76% saying they would put it into savings. The second highest number (69%) want to use their spare cash on home improvements and decorating and 65% on investing in shares and mutual funds. Unsurprisingly, 54% would spend it on out of home entertainment as they seek some respite from their current daily stresses and strains.
“Nigeria has faced turbulent times in the last two years. The drop in oil prices coupled with exchange rate volatility severely affected the economy, leading to recessionary trends from mid-2016, and rapidly rising inflation. As exchange rates attained stability, the economy has gradually started to recover and consumer sentiment shows marginal recovery from the low point in Q4 2016. With improving job and financial stability, and inflationary relief, we expect recoveries in sentiment and consumption,” comments Gupta.