Consumer confidence soars as Nigeria’s economy recovers

The confidence of consumers in the Nigerian economy has increased due to improvements in various areas of the country’s financial sectors, data from the National Bureau of Statistics (NBS) and other sources have shown.

This may not be unconnected to the increase in economic activities usually experienced towards the end of the year that translate to a slight growth in the economy evident in savings and spending.

For instance, the NOIPolls released the Consumer Confident Index (CCI) report for the last quarter of 2017 that showed that consumer confidence increased by 3 points to stand at 70.5-points compared to the third quarter of last year when it stood at 67.5 points.

Consumer Confidence Index of 50 points and above indicates that consumers are optimistic with respect to the economy in the near future and this means that they tend to purchase more goods and services.

Increased purchase of goods and services invariably increases spending in the economy which in turn inevitably stimulates the whole economy.

Additionally, data from the NBS for the last quarter of 2017 suggest that the country’s economic recovery remains largely on track as the Purchasing Manager’s Index signalled a healthy growth in November, 2017.

Similarly, the two independent variables that make up the consumer confidence index, the Present Situation Index (PSI) and the Expectation Index (EI), both experienced an increase.

The PSI experienced an increase of 6.4 points to stand at 50.6 in Q4, 2017 while the EI also experienced a minimal increase of 0.9 point to stand at 85.5 points.

It is important to note that businesses, financial and government agencies largely depend on their perceptions and micro assessment of consumers’ expectations in making decisions. At best, they draw conclusions on the business environment based on information from their immediate surroundings while the minorities conduct surveys