Tuesday, May 24, 2016 10:29AM/ Nielsen
Measuring 120 points in Q1 2016, Nigeria’s consumer confidence has dropped to its lowest levels in about 2 years according to the latest Consumer Confidence Index released in May 2016 by Nielsen, a global information & measurement company.
Confidence levels in Nigeria dropped by 7 index points from Q4 2015 as FX challenges – Naira Depreciation, Higher Energy & Food costs drove Inflation to a 4-year all-time high of 13.7% ; negatively impacting consumer disposable income and spending intentions.
Nigeria now ranks 14 points behind India – the most consumer confident country in the world. Consumer confidence global average stands at 98 points. Nigeria’s consumer confidence has seen consistent drop from its 132 high in Q2’15 to its current levels of 120 (See Chart 1).
The current drop is a reflection of current economic climate of lower productivity, increased unemployment and slower investments across all segments of the economy. However, despite the drop Nigeria maintains a higher index number relative to other peer economies in Sub Sahara Africa when a side by side comparison is done (See Chart 2).
In Nigeria, all three confidence indicators of outlook for jobs, sentiment for personal finances and immediate spending intentions declined from the previous quarter. The percentage seeing a positive outlook for jobs in the next 12 months dropped eight points to 65%. The share expressing favorable personal finance sentiment declined three percentage points to 79%, and the share with immediate-spending intentions declined eight percentage points to 42%.
Given the declining condition of the outlook for many consumers; they are expected to re-prioritize spend to survive the times. The impact of this is already being seen with decline in consumption of many FMCG categories.
To win, FMCG players must strive to position themselves to consumers as offering the best “value” for their products in terms of pricing & packaging. Driving availability, awareness and trust would equally be critical.