Ghana’s latest Consumer Confidence Index (CCI) for the second quarter of 2019 shows an extremely healthy increase of 10 points to 118, while Nigeria’s CCI has increased by one point to 127. These two sets of results present an optimistic picture of consumer sentiment across West Africa.
Looking at Ghana’s overall performance, Nielsen Market Lead for West Africa, Yannick Nkembe comments: “Ghana is currently the poster-child for African economic growth and positive consumer sentiment. The International Monetary Fund estimates its GDP will rise 8.8% this year – double the pace of emerging economies as a whole, and well ahead of world growth.
“This is a result of factors such as expanding crude oil production, a stable democracy and the introduction of a more favorable taxation structure. Ghana’s manufacturing industry has also been boosted by policies aimed at diversifying the economy and preventing an over-reliance on the commodity markets.”
This overall positive outlook is reflected by Ghanaian consumers’ greatly improved view of their job prospects with a 10-point increase to 63%, saying they will be excellent or good in the next six months. In terms of the state of their personal finances over the next 12 months, 74% say excellent or good – up from 70%; and the number of Ghanaian consumers who feel now is a good or excellent time to purchase has also seen a large increase quarter on quarter, from 34% to 46%.
Looking at whether Ghanaians have spare cash, 52% say yes; up nine points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (82%) put their spare cash into savings, followed by 72% on home improvements/decorating, and 67% who invest in stocks and mutual funds.
When looking at the real life factors that are having a negative impact on Ghanaians’ outlook, the top concerns over the next six months include work/life balance at 24%, the same figure as the last quarter; rising food prices at 22% (dropped by three points compared to Q1’19); tolerance toward different religions, also at 22% (increased by 1% since the previous quarter); and children’s education and welfare at 18%, which has seen a 2-point increase.
Stable sentiment in Nigeria
In contrast to Ghana’s leaps and bounds in confidence during the second quarter, Nigeria’s CCI figure increased by one point; however, at 127 it is still way higher than Ghana’s consumer confidence, and the highest confidence level for the country since the first quarter of 2016.
Commenting on the recent resurgence in consumer sentiment, Nielsen MD for Nigeria, Ged Nooy says: “Following a turbulent period in its history, Nigeria’s economic recovery is gaining momentum – with GDP expected to grow slightly to 2.5% year on year, off the back of moderate improvements in net exports and domestic demand. Nigerians are optimistic about their future, and this is reflected in the confidence scores”.
Looking at the consumer picture, Nigerians’ immediate-spending intentions have shown a healthy increase – with 54% of consumers versus 46% in the previous quarter saying now is a good or excellent time to purchase what they want or need. However, their perception around job prospects have slightly declined, with 60% viewing them as excellent or good; a nine-point drop from the previous quarter.
Sentiment around the state of personal finances has shown a slight improvement, with 82% Nigerians agreeing their state of personal finances will be excellent or good over the next year; a one-point increase from the previous quarter.
Looking at whether Nigerians have spare cash to spend, 51% said yes versus 55% in the previous quarter. In terms of their spending priorities once they meet their essential living expenses, of the following categories 76% would invest in home improvements/decorating; 73% would put their spare cash into savings; and 66% say they will invest in shares/mutual funds. Surprisingly, in light of their propensity toward savings and investment, the lowest number – 39% – said they would put their spare cash into retirement funds.
Looking at the top concerns for Nigerians over the next six months, work/life balance tops the list with 27% (a six-point increase compared to the previous quarter) and has displaced political stability as the number-one concern for Nigerians. This is followed by increasing food prices at 22% (a one-point increase compared to Q1’19) and the economy at 20% (a four-point increase compared to the previous quarter).
Elaborating on these results, Nooy says: “Nigerian consumers are positive and open to spending; however, the country’s retail environment continues to feel the effects of steep inflation. Manufacturers and retailers will therefore need to tackle this challenge, head-on, to harness the true value of Nigeria’s powerful consumer base”.