SPEND­ING NOW SLOWS DOWN

Business Daily (Kenya) - - FRONT PAGE - Brian Ngugi bn­[email protected]­tion­media.com

Kenyan con­sumer spend­ing slowed be­tween July and Septem­ber this year amid wors­en­ing eco­nomic con­di­tions and a gloomy eco­nomic out­look

Kenyan con­sumer spend­ing slowed be­tween July and Septem­ber this year amid wors­en­ing eco­nomic con­di­tions and a gloomy eco­nomic out­look.

The Nielsen Con­sumer Con­fi­dence In­dex (CCI) score for the pe­riod dropped 10 points from pre­vi­ous quar­ter to 94, re­veal­ing a volatile con­sumer mind-set and un­der­ly­ing un­cer­tain­ties.

“Con­sumer con­fi­dence was up­beat at the be­gin­ning of the year. This was due to the po­lit­i­cal sit­u­a­tion set­tling down, GDP strength­en­ing and the coun­try emerg­ing out of a pe­riod of drought,” says Nielsen Sub-sa­hara Africa man­ag­ing di­rec­tor Bryan Sun.

“How­ever, since no ma­jor im­pact has been felt on ground, con­sumers are read­just­ing their ex­pec­ta­tions.”

This, cou­pled with the re­cent in­crease in fuel prices, he said led to a surge in the cost of con­sum­able com­modi­ties and the pro­longed cold sea­son af­fected agriculture and led to price in­creases for cer­tain items.

“As a re­sult, con­sumer spend­ing power has weak­ened with a re­sul­tant damp­en­ing of over­all con­sumer sen­ti­ment,” he said.

Ac­cord­ing to the sur­vey, 58 per­cent of Kenyans polled de­scribed the state of their per­sonal fi­nances over the next year as ex­cel­lent or good— down by 11 points from the sec­ond quar­ter of the year.

A fur­ther 37 per cent de­scribed as “not so good or bad”, up from 23 per cent in the pre­vi­ous quar­ter.

“There is also a less pos­i­tive out­look in terms of Kenyan con­sumers im­me­di­ate-spend­ing in­ten­tions, which has fallen to 22 per­cent of re­spon­dents (down from 31 per cent in quar­ter 2) who say now is a good or ex­cel­lent time to pur­chase what they need or want,” says the study.

How­ever, the view around job prospects has re­mained sta­ble with the same number as the pre­vi­ous quar­ter (44 per­cent) view­ing them as ex­cel­lent or good and al­most half (49 per­cent) con­sid­er­ing them as not so good or bad.

The study show only 33 per­cent of Kenyans have spare cash to spend although this is up from the pre­vi­ous quar­ter (29 per­cent), while the ma­jor­ity (67 per­cent) said they lacked cash to spend.

Once es­sen­tial ex­penses are met, spend­ing pri­or­i­ties shift with the high­est per­cent­age (85 per­cent) spend­ing on home im­prove­ments, fol­lowed by putting it into

sav­ings (79 per­cent), and in­vest­ing in shares and mu­tual funds (74 per­cent).

Health­care con­cerns have come to the fore with 60 per­cent say­ing they would spend spare cash on pay­ing med­i­cal in­sur­ance pre­mi­ums.

--FILE

Work­ers at a su­per­mar­ket in Nairobi.

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