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Shifting Sands of Consumer Sentiment Across West Africa

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  • Ghana’s consumer confidence declines by five points
  • Improved perception of Nigerian finances, job prospects & spending intentions

Ghana’s latest Consumer Confidence Index (CCI) for the fourth quarter of 2018 shows a five point decrease to 108, while Nigeria’s CCI has dropped one point to 117, presenting a diverse picture of
consumer sentiment across West Africa.

In terms of Nigeria’s performance, Nielsen Nigeria MD Ged Nooy comments; “In Q4’18, the consumer outlook in Nigeria dipped marginally versus the previous quarter. Continued inflationary pressures and uncertainties around the elections could have impacted consumer sentiment, leading to a one-point drop in the consumer confidence index. However, despite the drop, consumers showed increased propensity towards stocking up on the necessities as a result of year-end festivities.”

When it comes to job prospects, 62% Nigerians view their prospects as excellent or good (a 6 point increase from the previous quarter) and 31% view them as not so good or bad. In terms of the state of their personal finances over the next 12 months, the same amount as the previous quarter (79%) say excellent or good. In addition, the number of Nigerian consumers who feel now is a good or excellent time to purchase what they need or want has increased three points to 46%.

Looking at whether Nigerians have spare cash, exactly half (50%) say yes, down five points from the previous quarter. In terms of what their spending priorities are once they meet their essential living expenses, the highest number of consumers (73%) would put their spare cash into savings, followed by 71% on home improvements and 68% who would invest in stocks and mutual funds.

Ghanaians less positive

While Nigeria showed a slight decline in confidence; Ghana’s CCI figure dropped a substantial five points to 108. Commenting on the reasons for this Nielsen Market Lead for West Africa Emerging Markets Yannick Nkembe says; “The continued depreciation of the Cedi, the collapse of certain banks leading to job losses, and the high cost of credit and an inability to access credit have led to a drop in consumer sentiment in Ghana”.

This decline in sentiment is clearly reflected in Ghanaian consumers’ immediate-spending intentions. Only 40% Ghanaians say now is a good or excellent time to purchase what they want or need, a substantial eight-point drop compared to the previous quarter. Negative sentiment is also reflected in Ghanaian’s job prospects. Only 58% Ghanaians view their job prospects as excellent or good, experiencing a six-point drop compared to the previous quarter.

Sentiment around the state of personal finances has also taken a slight hit with Ghanaians who think the state of their personal finances would be excellent or good over the next year having dropped nine points from the previous quarter to 67%. This in comparison to 31% who think that the state of their personal finances is not so good or bad, which represents a substantial 13% increase in this negative sentiment.

Looking at whether Ghanaians have spare cash to spend, 42% said yes, versus 53% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, the highest number of consumers (77%) would put their spare cash into savings and the same number will spend on home improvements, while 70% said they would invest in shares/mutual funds.

Elaborating on these results, Nkembe says; “Consumer confidence in West Africa declined in the last quarter of 2018. However, it still falls on the positive side of the spectrum and we hope to see a rebound in confidence levels in 2019.”

The Nielsen Consumer Confidence and Spending Intentions survey was conducted on 15-16 Nov’18 in Kenya, Ghana, and Nigeria among 1 500 respondents, using mobile methodology. The sample has quotas based on age and gender for each country.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

South Africa’s iGas, PetroSA and Strategic Fuel Fund Merge to Create South African National Petroleum Company

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markets energies crude oil

The South African Department of Mineral Resources and Energy (DMRE) has announced the merger of Central Energy Fund (CEF) subsidiaries iGas, PetroSA and the Strategic Fuel Fund (SFF).

The merger will be effective from 1 April 2021 and the new company will be called the South African National Petroleum Company.

The merger, driven by the pursuit of implementing a new company that has a streamlined operating model via the development of a shared services system and a common information platform, comes a few months after cabinet approval and the confirmation that PetroSA had incurred losses of R20 billion since 2014.

Additional factors which prompted the move included the determination to strengthen PetroSA which had not had a permanent CEO in five years prior to the appointment of CEO Ishmael Poolo last and, had become majorly ungainful since its failure to secure gas for the gas-to-liquids refinery project in Mossel Bay.

While the merger deadline has been set, the portfolio committee expressed reservations to the department’s likelihood of meeting the deadline, considering the existing legislative regime, pending issues raised in the SFF and PetroSA forensic reports, as well as PetroSA’s current insolvency and liquidity challenges, the official press statement on the briefing revealed.

“South Africa’s energy sector is entering a new dawn,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With gas discoveries off the coast and the announcement of the REIPPP programme bid window 5 and 6 on the horizon, now is the most opportune time for the merger of the CEF subsidiaries. Of course, it is not an easy task and delays may be anticipated but, this move signals a real change towards a meaningful strategy that will not only be beneficial to the DMRE but to potential investors and local development as well.”

The African Energy Chamber welcomes this move and acknowledges that this is yet another step supporting the country’s determination to restarting the engines of sustainable growth and the transformation of energy policy and infrastructure.

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Crude Oil

Crude Oil Hits $71.34 After Saudi Largest Oil Facilities Were Attacked

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oil

Brent Crude Oil Rises to $71.34 Following Missile Attack on Saudi Largest Oil Facilities

Brent crude, against which Nigerian oil is priced, jumped to $71.34 a barrel on Monday during the Asian trading session following a report that Saudi Arabia’s largest oil facilities were attacked by missiles and drones fired on Sunday by Houthi military in Yemen.

On Monday, the Saudi energy ministry said one of the world’s largest offshore oil loading facilities at Ras Tanura was attacked and a ballistic missile targeted Saudi Aramco facilities.

One of the petroleum tank areas at the Ras Tanura Port in the Eastern Region, one of the largest oil ports in the world, was attacked this morning by a drone, coming from the sea,” the ministry said in a statement released by the official Saudi Press Agency.

It also stated that shrapnel from a ballistic missile dropped near Aramco’s residential compound in Eastern Dhahran.

Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” a ministry spokesman said in a statement on state media.

Oil price surged because the market interpreted the occurrence as supply sabotage given Saudi is the largest OPEC producer. A decline in supply is positive for the oil industry.

However, Brent crude oil pulled back to $69.49 per barrel at 12:34 pm Nigerian time because of the $1.9 trillion stimulus packed passed in the U.S.

Market experts are projecting that the stimulus will boost the United States economy and support U.S crude oil producers in the near-term, this they expect to boost crude oil production from share and disrupt OPEC strategy.

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Crude Oil

A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

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Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.

Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.

A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.

One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.

However, Saudi authorities are yet to confirm or respond to the story.

 

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