Against the backdrop of the unprecedented COVID-19 pandemic, West African consumer sentiment has experienced a lift of 8 points in the Nielsen Consumer Confidence Index (CCI) for Quarter 3, 2020 with Nigeria CCI increasing to 116, up from the previous quarter’s 108 points.
Nielsen West Africa Retail Intelligence Lead Ged Nooy comments; “The latest consumer sentiments reflect the country’s continued cautionary concerns albeit with some practical fine-tuning. As the global pandemic continues to affect world economies and put pressure on consumers’ pockets, Nigerians consumers are making lifestyle adjustments and taking actions to protect their long-term economic future.”
Equitable optimism by Nigerian consumers also sees improved confidence around the opportunity of job prospects, with 55% of consumers saying they will be good or excellent in the next 12 months – a 12-point increase from the previous quarter. In terms of the state of their personal finances over the next 12 months, 67% say they are excellent or good, showing a substantial 8-point increase from the previous quarter.
Nigerian propensity to purchase has seen a continued decrease quarter on quarter, with the number of those who think now is a good or excellent time to purchase what they want or need rise just 1 percent from 32% to 33% in the third quarter.
Once they meet their essential living expenses, however, the highest number of consumers (75%) put their spare cash into savings, a drop from 81%1 percent from last quarter, followed by 72% who choose to invest in stocks and mutual funds.
One of the most significant increases in discretionary spending is the purchase of tech up from 51% to 57% – a clear indicator of consumers’ mindset shift away from non-essential services and their desire to make necessary work/life changes under the pandemic protocols.
Sluggish Recovery
To reduce expenses, 50% of consumers said they spent less on new clothes, 54% spent less on out of home entertainment, with the same figure deferring on the replacement of major household items. As much as 33% of Nigerian consumers said they had spare cash, up 1% from last quarter.
When looking at the practical factors that are affecting their outlook, the top consumer concerns over the next twelve months are increasing food prices at 34%, followed by life/work balance at 20% and the economy at 17%.
Nooy comments; “Nigerian economic recovery is of concern to consumers and may be more gradual than expected due to a drop in oil prices and restricted trade opportunities. The country has opportunities to transform its economy however, particularly in agro-processing beyond the pandemic.”