- Consumer confidence of Ghanaians decline by 15 points
- Nigerians’ consumer confidence plummet by 14 points
A survey by Nielson, a global measurement and analytics company, has shown that Ghana’s Consumer Confidence Index (CCI) has declined by 15 points and Nigeria, decreased by 14 points.
The Nielsen Consumer Confidence Index (CCI) is a product of the Global Consumer Confidence Survey which looks at understanding consumer sentiment around the world regarding consumers’ outlook on the economy, job prospects, financial outlook, their biggest concerns as well as spending and saving intentions.
The drop in consumer confidence in Ghanaians was discovered while Nielson conducted a survey to determine the consumer sentiment experienced in West Africa. Following the survey on CCI for the second quarter of 2020, it was established that Ghana’s consumer confidence is a decreased to 104 while Nigeria’s CCI has decreased to 108.
According to the survey, the drop in index is as a result of the unprecedented COVID-19 pandemic.
The Market Lead for Nielsen West Africa Expanded Market, Yannick Nkembe commented on Ghana’s performance by saying,
“the latest consumer sentiments reflect the market reality. With the global pandemic affecting the economy and causing general uncertainty all around, consumers have readjusted their confidence levels and are also more cautious with their spend”.
The survey showed that Ghanaians have substantially dropped their stance around job prospects, with about 45 per cent saying they will be good or excellent in the next 12 months – a 16-point decrease from the previous quarter.
Looking at personal finances over the next 12 months, 60 per cent of Ghanaians say they are excellent or good, again a significant 16-point decrease from the previous quarter.
The tendency of Ghanaians to purchase has also plummeted on quarterly basis, with the number of those who think now is a good or excellent time to purchase, what they want or need dropping from 52% to 33% in the second quarter.
There is also a 13-point decrease from the previous quarter in terms of savings. This is because only 43 per cent of Ghanaians say they have spare cash. Once they meet their essential living expenses, the highest number of consumers (74%) put their spare cash into savings – followed by 73% on home improvements/decorating and 56% who would invest in stocks and mutual funds. One of the most significant drops in discretionary spending is on holidays, down from 58% to 27% – a clear indicator of consumers’ mind-set shift away from non-essential services and their desire to avoid unnecessary travel.
Consumers attitude to fundamentally change
When Ghanaians were asked whether they had changed their spending to save on household expenses compared to this time last year, 75 per cent responded yes. 53 per cent said they spent less on new clothes, 52 per cent reduced expenses on out of home entertainment as well as total replacement of major household items.
The survey also disclosed that 29 per cent of Ghanaians are concerned about increasing food prices in the next twelve months, 23 per cent concerned about work or life balance and 22 per cent concerned about their children’s education within the same time frame.
“Ghana has previously experienced strong business prospects, and with the relatively earlier easing of restrictions to stimulate its economy, recovery in Ghana is likely to rebound sooner. We expect consumers to revert to previous consumption behaviours, although some of their attitudes will have fundamentally or permanently changed post the pandemic”.
Yannick Nkembe
Nigeria
The Managing Director (MD) for Nielsen Nigeria, Ged Nooy commented on Nigeria’s CCI decline saying,
“as Africa’s largest economy and the largest exporter of oil, Nigeria’s economy was already under immense pressure before the COVID-19 lockdown due to the collapse in international oil prices. Based on the additional economic pressure as a result of the COVID-19 pandemic, Nigeria therefore instituted a fairly early easing of its 5-week lockdown in early May due to the adverse financial effects on its economy and population”.
The survey showed that in the next 12 months, 31 per cent of Nigerians are concerned about attaining a work/life balance, 23 per cent concerned about increasing food prices and 19 per cent concerned over the economy.
Elaborating on these results, Nooy says:
“Economic recovery has been sluggish and will remain severely constricted due to the oil price crash amid and beyond the pandemic. For Nigeria’s manufacturing and retail sectors to rebound will require a sharp focus, as trade opportunities and execution remain severely constrained – having further deteriorated during the partially restricted living period”.
