The latest Nielsen Consumer Confidence Index (CCI) results for Q2, 2016 show that of the four sub-Saharan African countries measured by Nielsen, Nigeria's consumer confidence score (122) continued to rank highest, rising two points from the first quarter. Kenya's score (114) was not far behind, rising six points in the second quarter, following a five-point rise in the first quarter. Ghana's confidence score of 104 was unchanged for the third consecutive quarter, while South Africa consumer confidence increased three points to 78. (Note: CCI levels of above or below a baseline of 100 indicate degrees or optimism and pessimism, respectively.)
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted from 9-27 May 2016, and polled more than 30,000 online consumers in 61 countries. Interestingly, Kenya, Ghana and Nigeria are the only countries in the world whose data is compiled from a mobile survey methodology.
The latest Nielsen Africa Prospects Indicator report shows that Kenya has some of the most positive macroeconomic indicators. Economic growth is one of the highest across the continent at 5.6%, as its economy is less reliant on commodities, and the subsequent slump in prices. Inflation has been well contained relative to other countries, and the country is viewed as one of the most attractive growth prospects for businesses.
In Kenya, all three confidence indicators continued to increase in the second quarter: job prospect sentiment increased six percentage points to 61% favourable, personal-finance sentiment increased by two points to 67%. Immediate spending intentions also improved to 40% and an increased number of respondents (38% up from 35%) said they have spare cash.
Among those who did claim discretionary funds, saving continued to be a priority for the majority of Kenyans at 82%, followed by home improvements/decorating at 75% and investing in shares of stock or mutual funds at 68%.
Nigeria and Ghana
In Nigeria, immediate-spending intentions jumped five percentage points to 48%, but personal-finance sentiment (81%) and the job prospect outlook (64%) were relatively stable from the first quarter.
In Ghana, job prospect sentiment decreased to 44%, declining by four points over the previous quarter. Personal-finance sentiment dropped one percentage point to 69% and immediate-spending intentions increased by one percentage point to 36%.
The majority of consumers in Ghana and Nigeria said they did not have spare cash (66% in Ghana; although this figure dropped to 51% in Nigeria). Among those who claimed discretionary funds, saving continued to be a priority for the majority (81% in Ghana and 83% in Nigeria) who plan to put money into savings accounts. This shows there is a continued focus on long-term financial savings - perhaps a reflection of the current cautionary outlook amidst turbulent economic conditions.
In South Africa consumer confidence improved three points to 78. In terms of perceptions around local job prospects in South Africa in the next 12 months, 77% of respondents said not so good or bad.
South African perceptions of personal finances remained relatively stable in comparison to the previous quarter, with the majority (53%) viewing them as excellent or good, while 36% as not so good. Considering the cost of things today and their own personal finances, 77% said this would not be a good time to spend, the same figure as the previous quarter.
With regards to how South Africans utilise their spare cash after covering essential living experiences, an increased number (44%) would spend it on paying off debts, credit cards and loans, while 39% would put it into savings and 23% would spend it on entertainment.
The biggest worry for South Africans over the next six months is the economy with 41% of respondents citing it as their biggest or second biggest concern, followed by rising food prices at 24% and debt at 22%.
Global consumer confidence held steady in the second quarter of 2016 at 98, an index score that was flat from the first quarter and two points higher than a year earlier (Q2 2015). Consumer confidence scores are positive for twelve countries, including India, China, United States of America and the Asian developing markets of: Indonesia, Philippines, Vietnam and Thailand. 22 countries report declining consumer confidence levels, including Mexico, Argentina, Chile, Venezuela, Italy, Greece, Portugal and Japan.