Sentiment in the west of Africa is on the increase with the news that the latest Consumer Confidence Index (CCI) figures for Quarter 4, 2016 have seen Nigeria climbing three points to 116, after a steep decline in the third quarter, while Ghana’s score rose two points to 111.

Looking at the reasons for Nigeria’s improved consumer sentiment Nielsen East and West Africa MD Abhik Gupta comments; “Despite previous drops in consumer confidence, Nigerians are now more positive than Kenyans, South Africans and Ghanaians, in terms of their job prospects and personal finances and as the country’s macro, business and retail prospects recover we expect to see continued positivity amongst Nigerian consumers.”.

Adding to this positive outlook, the latest Nielsen Africa Prospects Indicator (APi), which integrates macro-economic, business, retail and consumer factors points to the fact that predictions are that the worst is over and it will not take much to drive the Nigerian economy into positive growth levels in 2017.

Short term positivity in Nigeria

In light of this, all confidence indicators in Nigeria increased in the fourth quarter. The percentage of respondents who predict that their personal finances will be good or excellent in the next 12 months jumped five percentage points to 80%, and 59% of Nigerian respondents said job prospects will be good or excellent, up one percentage point from the third quarter.

Immediate-spending intentions increased four percentage points, rising to 39% while more than four in 10 Nigerian respondents (44%) said they had spare cash, up from 36% in the third quarter.

In terms of what they would use this spare cash for, the highest number of Nigerians are seeking to batten down the hatches on their current financial future, with 80% saying they would put it into savings. The second highest number (69%) want to use their spare cash on home improvements and decorating and 62% on investing in shares and mutual funds. Unsurprisingly, 60% would spend it on out of home entertainment as they seek some respite from their current daily stresses and strains.

Mixed positivity in Ghana’s results

The overall increase in Ghana’s CCI, was due to a higher proportion of “Excellent” responses even though “Good” responses have declined. This means that despite the positive outlook for jobs dropping two percentage points from Q3 to an overall 55%, this was made up of 12% saying “Excellent” (up from 10% previous quarter) and 43% saying “Good”.

This was followed by positive personal-finance sentiment decreasing by one point to 76%, of which 23% said “Excellent” (up by 4 points) and 52% said “Good”. Immediate-spending intentions dropped by two percentage points to 40% of which 10% said “Excellent” (up by 4 points) and 30% said “Good”. Less than half of Ghanaian respondents said they had spare cash (47%) - a drop of 3 percentage points from the third quarter, however this proportion of consumers is higher than Nigerians (44%) and Kenyans (42%).

In terms of what they would use this spare cash for, Ghanaians remain financially conservative in their outlook, with the highest number (82%) saying they would put it into savings, the second highest number of respondents 72% see home improvements as a worthwhile investment while (59%) saying they would invest in shares/mutual funds.

Overall Gupta comments; “In the backdrop of improved confidence levels, businesses need to adjust to the altered daily habits that consumers are displaying to deal with the tough market conditions. As consumers have been forced to reduce consumption, only buying on an immediate need basis, businesses need to meet these new consumers realities with agility, flexible product offerings, packaging and pricing.”