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 from; 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.
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.”