Consumers expect Nigerian economy to improve in Q4′ 2020 – CBN

Consumers’ confidence in the Nigerian economy in the 4th quarter has increased with indices of 10.1 points.

By Abiola Odutola

The Central Bank of Nigeria stated that the Consumers’ confidence in the Nigerian economy in the fourth quarter of 2020 and the next 12 months has increased with indices of 10.1 and 30.5 points respectively.

This was disclosed by the Statistics Department of the apex bank in its Consumer expectations survey’ report for September, which was released on Friday.

According to the report, consumers were optimistic in their outlook for the next quarter and the next 12 months.

This positive outlook could be attributed to the expected increase in net household income, and anticipated improvement in Nigeria’s economic conditions and expectations, to save a bit and/or have plenty over savings in the next quarter and the next 12 months.

It stated, “Most respondents expected prices of goods and services to rise in the next 12 months, with an index of 36.2 points.

“The major drivers were savings, purchase of car/motor vehicle, purchase of appliances/ durables, education, food & other household needs, and purchase of houses.

“Overall buying intention index in the next 12 months stood at 29.7 index points, indicating that most consumers did not intend to buy big-ticket items in the next 12 months.”

It added that the buying intention indices for consumer durables, motor vehicles, and houses were below 50 points, which showed that respondents had no plans to make these purchases in the next 12 months.

However, the consumers’ overall confidence outlook dipped in Q3 2020, as consumers were pessimistic in their outlook.

It stated, “The index at -21.2 point was 25.0 points lower than the index in the corresponding period of 2019.

“Respondents attributed this unfavorable outlook to declining economic conditions, family financial situation, and declining family income.”

What you should know

The Overall consumer confidence index is computed as the average of the three indices, namely: Economic Condition, Family Financial Situation, and Family Income.

• Economic Condition refers to the perception of the respondent regarding the general economic condition of the country.
• Family Financial Situation refers to the level of savings, investments, other assets including cash at hand and outstanding debts.
• The report said consumers were however optimistic in their outlook for the next quarter and next 12 months with indices of 10.1 and 30.5 points respectively.
• This positive outlook could be attributed to the expected increase in net household income, anticipated improvement in Nigeria’s economic conditions, and expectations to save a bit and/or have plenty over savings in the next quarter and the next 12 months.
• Most respondents expected prices of goods and services to rise in the next 12 months, with an index of 36.2 points.
• The major drivers were savings, purchase of car/motor vehicle, purchase of appliances/ durables, education, food & other household needs, and purchase of houses.
• The overall buying intention index in the next 12 months stood at 29.7 index points, indicating that most consumers did not intend to buy big-ticket items in the next 12 months.
• The buying intention indices for consumer durables, motor vehicles, and houses were below 50 points, which showed that respondents had no plans to make these purchases in the next 12 months.

Abiola Odutola

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - abiola.odutola@nairametrics.com.