Nairobi, Kenya - Africa's first monthly consumer confidence index (KIC Score) rose slightly in May to reach +12. At this level, it means that the number of consumers who are optimistic is slightly superior that those who are pessimistic (a score of zero implies equal numbers in both camps). With a maximum of 100 and a minimum of -100, the current KIC level indicates that economic confidence continues to be barely positive in the urban centers polled. The sub-index for current economic condition metric remained negative at -14 down 2 points from April. However, consumers have hope in the future with the sub-index for economic expectations rising to +22, up 2 points from April.
The May readings of the KIC score range from -5 in Tanzania to +44 in Ghana.
Nigerians most confident about national and city economy
Consumers in Nigeria are by far the most optimistic about economic conditions in the country and in the city closely followed by consumers in Accra. The National Bureau of Statistics (NBS) said that inflation dropped by 0.52 per cent in March, the second decline recorded on the YoY basis. In Ghana, the central bank cut its benchmark interest rate for a second time in March as the cedi recovered from record lows and inflation slowed to the lowest rate in more than 3 years. Consumers in Tanzania and Kenya are the least optimistic about their respective countries and cities. This reflects the economic challenges in Kenya (inflation) and anxiety ahead of the presidential election in August. In Tanzania, the ministry of finance has recently acknowledged concern over the increase frequency of business closure signaling a slow down of the economy.
Personal finances looking up in Ghana
Consumers in Accra are the most optimistic about their income prospects over the next six months, followed by those in Lagos. But as was seen last month, this optimism does not translate to expectations about meeting regular expenses, where Johannesburg residents lag far behind all other cities. Consumers in Accra are the most positive when asked whether they will be able to meet their regular expenses over the next six months. This disjuncture between views about the economy and personal finance may also reflect perceptions about inequality, where ordinary consumers do not believe that national or even regional economic gains flow proportionately to all residents. The divergence might also be a function of consumers’ more realistic and accurate assessment of their own personal finances relative to their assessment of the overall economy.
Residents in Ghana the most willing to spend
As in April, consumers across the cities surveyed are holding tight to their purses. The residents of Accra are more willing to make large purchase. The score for buying durables is in negative territory in four out of the seven urban centers polled. In most cities except Accra, residents are also likely to keep their spending on durables static in the next six months.
Getting a job is difficult across markets
As in April, consumers across the cities surveyed find it difficult to get a job in their area. The job prospect score is negative across markets: Lagos and Abuja ranking the lowest at -78 and Douala ranking the highest at -2.
KASI KIC Score’s 3114 sample survey of individuals in 7 urban centers in Africa was carried out between May 20 – June 4 of this year, and was conducted via our desktop survey capability.
Trudi Makhaya, economic advisor at KASI Insight said that "The readings and trend we obverse with the KIC score show that consumer sentiment can constitute a better reflection of the economy conditions. Tanzania is going through a slow down with business closures that are having an impact on consumer confidence. Ghana continues to show strong consumer confidence reaching another all-time high, further proof that the economy is picking up.
Note: Tanzania was added to the KIC Score in February.
About the KIC Score
The KASI Insight Consumer Confidence Score (KIC SCORE) is a composite index compiled from a seven-questions survey that runs monthly via our consumer polls in the countries covered. The data output is based on fresh, randomly selected representative sample of city dwellers aged 18-64.
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