KASI consumer-sentiment index rebounded by 10 points in May to -18 from its all-time low of -28 recorded in April. The consumer-expectations index and current-economic conditions index recovered by 9 and 10 points respectively, leading to the overall improvement of consumer sentiment.
Household spending rebounded by 18 however their levels are still below the pre-COVID-19 levels. Purchasing power and the future of job prospects stagnated and remained at their lowest levels.
Tanzania consumer-sentiment index plunged to an all-time low of -24 as the index fell by a further 13 points. Nigeria recorded the biggest gain in its consumer sentiment index rising by 33 points from -27 to 6. South Africa continues to lag as the country with the lowest consumer sentiment index even with a rise in its index this month.
Despite the number of infections rising faster in the continent, the prospect of governments easing lockdown and economies opening up have led to optimism on the future of the economy. Furthermore, consumers are now adapting to the “Covid-19 lifestyle” after the initial shock of the pandemic that caused a readjustment to their usual spending behavior. Though consumer-sentiment rose this month, the index is still 3 points below that of March this year when the coronavirus outbreak caused the largest decline in the index.
Tanzania consumer sentiment index plunged to an all-time low of -24 as the index fell by a further 13 points in May.
The consumer-expectations index dropped by 26 points whereas the current-economic conditions rebounded by 21 points. This divergence reinforces the fact that consumer confidence in Africa is driven mainly by future expectations and not the prevailing economic conditions. Tanzania has been under scrutiny for its handling of the coronavirus pandemic. Unlike other countries where bans on social gatherings and lockdowns were imposed, the Tanzanian government encouraged worshippers to congregate and “pray the virus away” while putting in place few measures to curb the spread of the virus. Moreover, there is a lack of transparency on the state of Covid-19 in the country and this has raised concerns among its citizens.
Nigeria recorded the biggest gain in its consumer sentiment index rising by 33 points from -27 to 6
This rebound comes on the back of its largest decline last month when it fell by 48 points (from 21 to -27). The recovery of its consumer-sentiment index can be primarily attributed to the increase in the consumer-expectations index which rose by 40 points compared to the increase of 18 points in its current-economic conditions index. Despite the bounce in the index, consumer-sentiment still remains low relative to pre-Covid19 levels. Some states in Nigeria lifted partial lockdown and religious congregation is permitted. The slight recovery in oil prices has also helped its economy.
South Africa continues to lag as the country with the lowest consumer sentiment index even with a rise in its index this month. The rest of the countries realized increases of between 3 and 10 points in their consumer sentiment index.
"As governments continue easing lockdown restrictions and economies opening up, there is optimism on the future of the economy. However, with an emergence of 2nd waves in countries like China, this uptick in confidence may be temporary especially if countries decide to reinstate lockdown measures to stop the wave.” said Davies Nyachienga, Economic Intelligence Group at KASI.
About the methodology
KASI Consumer Confidence Score (KASI CCI) is a composite index compiled from a seven-question survey that runs monthly via our consumer polls in the countries covered. The data output is based on a fresh, randomly selected representative sample of city dwellers aged 18-64. Released the first week of every month, KASI CCI 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.
For each question, the final metric will be a ‘balance measure’ of the percentage of positive responses minus the percentage of negative responses. The overall metric will be an average across all the questions.
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