Nigerians plan to spend most on food, other basic items for the next 6 months, CBN survey

Nigerian households are planning to spend large amounts of their earnings on basic items such as food and education for the next six months.

This is according to a recent survey by the Central Bank of Nigeria (CBN).

The poll was conducted during the period of July 22 to 26, 2024, with a response rate of 99.7 percent with its sample size drawn from the National Bureau of Statistics (NBS) master sample list of 1,665 households.

The Abuja-based bank, said, in its new Household Expectation Survey published on its website that many Nigerians intend to cut down on items that are not essential now, in the next three and six months.

“Spending outlook for the next six months showed that consumers plan to spend a substantial amount of their income on the following items: food and other household Items (54.9 points), dducation (35.4 points), transportation (30.2 points), electricity (20.0 points) and medical expenses (12.2 points),” the poll shows.

On the other hand, the respondents do not plan to spend a substantial amount of income on big-ticket items such as purchase of house, car and household appliances.

Also, Nigerians do not intend to spend on investment, such as acquiring landed properties or other forms of investments. They equally do not plan on saving their incomes.

“This reflects their family financial situation in the current month and reaffirms their stance that they will be drawing down on their savings or getting into debt,” the apex bank survey shows.

Consumers expect naira to appreciate by January

The CBN survey also revealed that many Nigerian households expect the naira to continue to fall over the next three months but strengthen in the next six months.

“Consumers expect the naira to depreciate in the current month, next month and next three months but appreciate in the next six months,” the report stated.

The local unit plunged to N1,598 per US dollar on Friday, ending the month of August negative. This is even as it further fell to N1,639 per USD due to the shortage of the greenback.

The naira which was making some gains at the beginning of the second quarter of the year lost its steam and began to fall, making it the world’s worst currency after the Lebanon pound.

The respondents are however optimistic that the CBN’s monetary policy decisions will see the battered naira make a turnaround in the beginning of the coming year, 2025.

Households see inflation rising over the next six months

Also, the poll shows that Nigerians expect inflation, borrowing rates and unemployment to keep rising due to the harsh macroeconomic pressures.

Africa’s most populous nation is contending with rising prices which had sparked the worst cost of living crisis in decades.

The consumer price which fell slightly after rising for the 19th consecutive time stood at 33.40 per cent in July but still a 28-year high as consumers still considered it “too high”.

The incessant rise in prices have led to the CBN’s monetary policy committee jacking up the benchmark interest rates from 18.75 percent last July to now 26.75 percent, to rein in inflation.

This hike in monetary policy rate, though has begun to yield results as inflation drops mildly, has stoked lending rates for the already burdened businesses who now borrow at about 31 percent.

The respondents believed that the economy would end up weaker rather than stronger should prices start to rise faster than they do now.

“The survey result showed that 80.9 percent of the respondents believed that the economy would end up weaker, while 3.2 percent opined that it would be stronger,” the CBN survey revealed.