Consumers’ Confidence In Nigeria’s Economy Drops, Says CBN

The low income to households as well as the huge financial burden has dampened the level of consumer confidence in the Nigerian economy, the Central Bank of Nigeria has said.

The CBN said this in its third quarter Consumer Expectations Survey Report for the third quarter of this year which was released on Friday.

The apex bank said that overall, consumer confidence index dropped to -21.2 points during the review period, indicating a decline of 25 points below the index in the same period of 2020.

According to the CBN Survey, Nigerian consumers blamed the plunge in the country’s unfavourable outlook on the declining economic conditions, family financial situation and declining family income.

It said, “The consumers’ overall confidence outlook dipped in Q3 2020, as consumers were pessimistic in their outlook.

“The index at -21.2 point was 25.0 points lower than the index in the corresponding period of 2019. Respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income.”

“This positive outlook could be attributed to the expected increase in net household income, an anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty of savings in the next quarter and the next 12 months.

But the report showed consumers  expect improvement in the economy over the fourth quarter of last year and the next 12 months with indices of 10.1 and 30.5 points, respectively.

Adding to Nigeria’s surge in inflation,  consumers expect prices of goods and services to rise in the next 12 months, with an index of 36.2 points.

The CBN said the expected rise in prices will be driven by savings, purchase of cars, appliances and durables, educational spending, food other household needs and purchase of houses.

Based on the report, the overall buying conditions index for big-ticket items in the current quarter stood at 20.1 points.

This indicates that majority of consumers believed that the period was ideal for the purchase of valuables including cars and houses.

 
Also, over the next 12 months, the report revealed that most Nigerian consumers do not intend to buy big-ticket items.

On the borrowing and exchange rates outlook for the next 12 months, consumers expect the borrowing rate to rise, and anticipate the naira to appreciate.

The CBN Report showed a positive unemployment index for the next 12 months at 35.4 points in the third quarter of 2020.

The CBN said this is indicative that consumers generally expect the unemployment rate to rise in the next one year.