Kasi CCI saw no change this month as a 5-point increase in the current condition index and a 2-point fall in future expectations stabilize the CCI at +17
Local food production encouraged as volatile international markets and exchange rates cause inflation to hit the roof in Nigeria
Once changing lifestyle habits become routine as Nigerians settle into a new norm and this might mean certain industries will see loss for a considerable period of time
Sentiment levels in Nigeria remain on the positive end of the scale as KASI CCI recorded no change in the value of the index in the past month of August. The value remained stable at +17. While confidence in the current condition improved, as indicated by a 5-point increase in the index from -34 to -29, confidence in future expectations dipped two points in August, going from 37 to 35.
While the expectation is that economic conditions will improve, Nigerians are still only just making ends meet as unemployment remains very high
As cases continue to rise in Nigeria, so are recoveries. With strict measures in place, though cases increased to a value of 54 008 as of the 31stof August, recoveries are on the rise as well. This is bringing about optimism in the country regarding current conditions. The KASI CCI sub-index measuring sentiment about improvement in respondents’ country and cities rose 1 point to an index value of 44 and stayed stable at 37 respectively. This positivity could have been influenced by the recent announcement that it has been four years now since the last case of wild polio was recorded in Northern Nigeria. As a result, finally, the continent has been declared free of a virus that once caused a lot of turmoil.
Nigerians' positivity about the future, however, is dwindling and concerns revolve around the job sector. Though the job prospect index indicates a 4-point increase in sentiment, the index value remains at a low negative value of -64. According to KASI Covid Pulse data, 71.12% of respondents indicate that job search has become more difficult as a result of the pandemic. As job sectors all over the world contracted in the past 6 months, many countries are struggling to recover, Nigeria being one of them. Nigeria’s current unemployment rate has jumped to 27.1%. Combined with the underemployment rate, the figure sits at 56%. It is no wonder that our index measuring sentiment surrounding growth in household income fell 8 points from 53 to 45.
Inflation hits the roof this month – the highest reading in 2 years – and a solution lays in expanding local production of food
In terms of spending, Nigerians are still focused on working to put food on the table after the pandemic caused many to lose their jobs. KASI’s CCI sub-index measuring sentiment regarding making discretionary purchases fell a significant 10 points. It is expected that demand for products such as electronics, furniture and luxury items will remain low. Moreover, inflation is up to 13.2% in Nigeria, the highest reading since March 2018 when it was recorded to be 12.8% (National Bureau of Statistics). The high inflation was attributed to sudden spikes in the price of basic food items. In addition to that, the volatility of prices of oil in the global market due to the virus could have also been another factor.
Currently, in Nigeria, a large percentage of basic food items consumed are imported. As a result, any change in exchange rates overly impacts food prices and thus, inflation. Hence, a solution here lays in the increased production of basic food products locally.
As living through a pandemic becomes a new norm, Nigerians have settled into a new routine when it comes to their lifestyle habits
When COVID-19 first came around, it was expected that panic and social distancing measures would cause e-commerce to take off. According to KASI Covid Pulse data however, over the last 6 months, of our total survey, only 7.14% of respondents indicated that they adapted by moving to shopping online. In fact, the most prominent trends seen were people shifting to bulk buying habits, visiting stores infrequently as well as going to stores at less peak hours. While people have begun bulk buying less in comparison to the peak months of the virus, these trends have become the new normal when it comes to the way people navigate through their routines. During the first few months of the pandemic, majority of our respondents estimated that the COVID-19 virus would go away within the next month or two but now, more than 50% estimate that it will stick around for another 3-4 months from now.
This doesn’t bode well for many in the entertainment and tourism industries. As people still avoid theatres, malls and restaurants, many businesses will find their sales continuing to dwindle.
By Tanya Gandhi, 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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