Consumer confidence hits all-time low in Kenya ahead of the election
Nairobi, Kenya - Africa's first monthly consumer confidence index (KIC Score) barely changed in July at +10. 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 -11 down 1 point from June. However, consumers hope in the future with the sub-index for economic expectations dropped again 2 points from June to reach +18.
The July readings of the KIC score range from -5 in South Africa to +28 in Ghana. Kenya consumer confidence hit an all-time low at -1 in July ahead of the presidential elections. The index has been trending down since the beginning of the year and is 3% down YTD and 5% down MoM.
As Kenyans are headed to the poll tomorrow, the uncertainty around the winner and the post-election process is taking its toll on consumer confidence. Unlike Ghana last year, where we saw a jump in consumer confidence ahead of the presidential elections that resulted in a change in leadership, we are seeing a drop of confidence in Kenya. The election is shaping up to be a very competitive one.
Nigerians most confident about national and city economies
Despite continuous economic challenges, 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. Consumers in Tanzania and Cameroon are the least optimistic about their respective countries and cities.
Personal finance is strong in Ghana
Consumers in Nigeria are the most optimistic about their income prospects over the next six months, followed by those in Ghana. 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 urban areas. 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 June, consumers across the urban centers surveyed are holding tight to their purses. The residents of Accra are more willing to make large purchase while residents of Nairobi are now less willing to make large purchases. The score for buying durables is in negative territory in three (3) out of the seven (7) urban centers polled. In most cities except Douala and Lagos, 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 June, 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 -72 and Douala ranking the highest at +11.
KASI KIC Score’s 3345 sample survey of individuals in 7 urban centers in Africa was carried out between July 24 - July 31 of this year, and was conducted via our desktop survey capability.
Trudi Makhaya, economic advisor at KASI Insight said that " The political agenda in Kenya with the upcoming election is having an impact on consumer confidence. The Kenya KIC Score hit an all-time low in July at -1. Most notably, consumers are holding their purse very tight while awaiting for the outcome of the election. Making large purchase, willingness to spend more and job prospects sub-metrics are all trending negative now."
Note: Tanzania was added to the KIC Score in February.
About KASI 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.
Released the first week of every month, the KASI Insight Consumer Confidence Index (KIC Score) provides a focused view on consumer perceptions in seven African urban centers (Ghana, Nigeria, Kenya, South Africa, Cameroon, Ivory Coast, Tanzania) where most spending in the continent is concentrated. The survey provides a simple measure of consumers’ optimism about their economic prospects in the near term and attitude towards making major purchasing decisions.
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