Africa’s first monthly consumer confidence index (KIC Score) rose slightly in April to reach +10. At this level, it means that the number of consumers who are optimistic is slightly superior that those who are pessimistic (a score of zero implies equal numbers in both camps). With a maximum of 100 and a minimum of -100, the current KIC level indicates that economic confidence continues to be barely positive in the urban centers polled. The sub-index for current economic condition metric remained negative at -12 up 5 points from March. However, consumers have hope in the future with the sub-index for economic expectations rising to +20, up 3 points from March.
The April readings of the KIC score range from -8 in South Africa to +34 in Ghana.
Nigeria most confident about national and city economy
Consumers in Lagos are by far the most optimistic about economic conditions in the country and in the city closely followed by consumers in Accra. The National Bureau of Statistics (NBS) said that inflation dropped by 0.52 per cent in March, the second decline recorded on the YoY basis. In Ghana, the central bank cut its benchmark interest rate for a second time in March as the cedi recovered from record lows and inflation slowed to the lowest rate in more than 3 years. Consumers in Johannesburg and Abidjan are the least optimistic about their respective countries and cities. This reflects the uncertainty facing South Africa after its credit rating downgrade in March following the government reshuffle. In Ivory Coast, cocoa prices slump forced the government to cut its budget with social unrests on the rise in the country.
Personal finances looking up in Ghana
Consumers in Accra are the most optimistic about their income prospects over the next six months, followed by those in Lagos. But as was seen last month, this optimism does not translate to expectations about meeting regular expenses, where Johannesburg residents lag far behind all other cities. Consumers in Accra are the most positive when asked whether they will be able to meet their regular expenses over the next six months. This disjuncture between views about the economy and personal finance may also reflect perceptions about inequality, where ordinary consumers do not believe that national or even regional economic gains flow proportionately to all residents. The divergence might also be a function of consumers’ more realistic and accurate assessment of their own personal finances relative to their assessment of the overall economy.
Residents in Ghana the most willing to spend
As in March, consumers across the cities surveyed are holding tight to their purses. The residents of Accra are more willing to make large purchase. The score for buying durables is in negative territory in Johannesburg and Nairobi, and barely positive in Lagos. In most cities except Accra, residents are also likely to keep their spending on durables static in the next six months.
Getting a job is difficult across markets
As in March, consumers across the cities surveyed find it difficult to get a job in their area. The job prospect score is negative across markets: Abidjan ranking the lowest at -73 and Douala ranking the highest at -12.
KASI KIC Score’s 3500 sample survey of individuals in 7 urban centers in Africa was carried out between April 20 – 30 of this year, and was conducted via our desktop survey capability.
Trudi Makhaya, economic advisor at KASI Insight said that “The readings and trend we obverse with the KIC score show that consumer sentiment can constitute a better reflection of the economy conditions. Despite good macro trends (GDP forecast), Ivory Coast is going through challenging times. The job prospect sub-index actually hit an all-time low in April. Ghana’s proposed tax cuts and oil recovery are reassuring consumers while political uncertainty (elections) and economic headwinds are making consumers in Kenya a bit cautious.
Note: Tanzania was added to the KIC Score in February.
About the KIC Score
The KASI Insight Consumer Confidence Score (KIC SCORE) is a composite index compiled from a seven-questions survey that runs monthly via our consumer polls in the countries covered. The data output is based on fresh, randomly selected representative sample of city dwellers aged 18-64.