- Ghanaian consumer confidence declines by four points
- Nigerians consumer confidence also subdued
Lagos, 11 December 2019 – Ghana’s latest Nielsen Consumer Confidence Index (CCI) for the third quarter of 2019 shows a slight drop to 114 from the previous quarter’s buoyant 118, while Nigeria’s CCI has also decreased by five points to 122. 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.
Looking at Ghana’s overall performance, Nielsen Market Lead for West Africa, Yannick Nkembe comments; “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% 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% say they are excellent or good, down from 74% 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% to 45%.
Looking at whether Ghanaians have spare cash, only 42% say yes, down a substantial 10 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (82%) still say they will put their spare cash into savings, followed by 66% on home improvements/decorating and 59% 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%) followed by work/life balance at 22%, the economy and tolerance towards different religions, both at 18%, and job security coming in fourth at 16%.
In light of their outlook, more than three quarters (72%) 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%), looking for better deals on loans/insurance/credit cards (54%) and spending less on new clothes (53%).
A drop in sentiment in Nigeria
The third quarter also saw a drop in sentiment in Nigeria with consumer confidence decreasing by five points to 122, albeit it is still higher than the same quarter last year (118).
Commenting on the recent decline in consumer sentiment, Nielsen MD for Nigeria, Ged Nooy says; “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.”
Looking at the consumer picture, Nigerians immediate-spending intentions has shown a large decline; with only 41% of consumers (versus 54% 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% 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% 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% said yes, versus 51% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, 76% would invest in home improvements/decorating, 72% would put their spare cash into savings and 62% 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% – a one point increase compared to the previous quarter. This is followed by concerns around increasing food prices at 22% (the same as Q2’19) and tolerance towards different religions (19%) superseding the economy, which is now at 16% – a four point decrease compared to the previous quarter.
Elaborating on these results, Nooy says; “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.”
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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