Nigerians now live on “Hope Island”

How do you define a situation where your personal economic condition is so bad but your expectation of a better future is so high?  The answer could be that you are either living in self-denial or you are an incurable optimist. Nigerians are likely to fall into the group of incurable optimists, fired mostly by a high religious beliefs to always believe that no matter the condition today, tomorrow will be better. But this “unrealistic” optimism could also be easily termed by sceptics as a sign of a people living in self-denial.
This attitude of the incurable optimist or self-denial is easily seen in the second quarter Consumer Confidence Index released by NOI Polls. For the second quarter of 2017, the consumer confidence index or CCI stood at 64.83 points compared to 62.7 points in the first quarter, which is an indication of the improvement in the confidence level of consumers about the future.
As explained by NOI Polls “The Consumer Confidence Index reveals consumers’ tendencies to spend, which is directly proportional to their expectations for a general improvement in the country’s economic conditions, employment opportunities, personal financial strength and stability in the prices of goods and services.” The CCI is therefore a leading indicator, which could show that consumers will be inclined to spend more in future because they are more confident that their personal situation would improve.
This is why NOI Polls also measures the present situation index. In the second quarter, the Present Situation Index or PSI as measured by NOI Polls stood at 38.10 points, which also represented an improvement on a PSI of 34.34 in the first quarter of 2017. This means more Nigerians felt that their personal economic circumstances were better in the first quarter than in the second quarter of the year.
NOI Polls takes the measurement further by asking Nigerians what their expectation of their future circumstances is. This is measured as the Expectation Index or EI. In the second quarter, the expectation index at 84.87 points compared to 83.96 points in the first quarter. This is the highest index and indicates that Nigerians are highly optimistic about their future economic situation despite their pessimistic view of their present situation.
To better appreciate anomaly in the wide difference between the Present Situation Index and the Expectation Index, I decided to take a look the Consumer Confidence in the US for July 2017 as measured by the Conference Board. The CCI in the US for July stood at 121.1 points (with a 1985-base of 100). This represents an improvement on the 117.3 points in June, which also indicates that Americans are getting more confident about the future. The Present Situation Index stood at 147.8 points compared to 143.9 in June.
Notice  that the unlike Nigeria where the Present Situation Index is far lower than the CCI, in America, the PSI is actually higher than the CCI, an indication that people  are highly satisfied with their present economic situation unlike Nigeria. The Expectation Index in America in July stood at 103.3, which is an improvement on the June position of 99.6 points, also an indication that more Americans are optimistic about the future.
However, also notice that unlike Nigeria, the optimism in America is not unduly high and in line with their present economic situation. The American is looking more realistic than the Nigerian based on the CCI survey outcome.
But a different survey by NOI Polls, the Personal Well Being Index gives an insight into why Nigerians are so optimistic despite majority admitting that they are not satisfied with their present situation. The Personal Well Being Index (PWBI) according to NOI Polls “measures factors impacting on the lives of everyday Nigerians; thereby producing a complete view of the individual’s personal well-being.”
The PWBI for the second quarter stood at 65.4 points from 65.3 points in the first quarter which indicates a marginal improvement. But a breakdown of the seven indicators that make up the PWBI gives a better insight into what Nigerians think of their well-being.
“Analysis of the level of satisfaction of Nigerians in these 7 indicators showed that Nigerians are mostly satisfied with their personal Religion (90.4-points), Social Interaction (78.5-points) and personal Health (77.5-points). On the other hand, Nigerians maintained a neutral stance in their Personal Security (69.1-points), Achievement in Life (52.8-points) and Standard of Living (51.3-points). The Economic Situation index (40.5-points) represents the lowest of all the indices of the PWBI for Q2, 2017 as it has always been, although it experienced an increase of 1.6-points from Q1 2017″ according to the PWBI report.

 

Once more it is easy to notice how well Nigerians are satisfied with their religion, which stands at 90.4 points but are very dissatisfied with their economic situation, which scores the lowest point of 40.5 points. This also mirrors the consumer confidence index, where Nigerians are dissatisfied with their personal situation but have high expectations of the future.
For me the key to understand the disconnect between poor economic or present situation of the average Nigerian and the high level of optimism lies in the high level of satisfaction that Nigerians show in their religion, which helps them to live in “Hope Island” no matter how bad their current situation is.

 

This religion fired dwelling on “Hope Island” could explain why religious organisations  have become the fastest growing organisations in the country while many businesses struggle. Staying on “Hope Island” helps reduce the pain of their present situation. In the PWBI report, it is easily seen that complimenting the high religious satisfaction index, is also the social interaction index, which is the second highest, followed by the personal health index, which is the third highest. These two indexes could be explained by the fact the Nigerians are highly religious and derive their social interaction from being members of their religious organisation, which has a positive impact on their health from the joy of meeting with others even when they do not have anything.
Even the government lives on “Hope Island” when it comes to projecting into the future. For example, even though economic growth will be less than one percent this year, the Federal Government is hoping to achieve a growth rate of 4.8 percent in 2018. The government is being highly optimistic, analysts will say. The 2018 budget is based on an exchange rate of N305 to the US$ when the market determined exchange rate is an average of N366 with an outlook for a weaker than a stronger currency.

 

While there are some advantages, the downside to living on Hope Island is that businesses and decision makers will have to discount expectations about the future. A business that goes on expansion drive based on rising consumer confidence in the country may soon discover that it has gone on a fools ride as there may not be “effective demand” in hope Island for the new goods and services created. Also, for decision makers, especially political decision makers, a rising CCI may not necessarily mean that the right decisions are being taken. Decision makers will have to dig a little bit deeper to find out the true impact of their decision on the personal well-being of the citizens.

 

For the average Nigerian, it is not clear if this unrealistic optimism is good or bad. Hoping for a better future is not a strategy, a friend told me recently. It may help reduce the pain of a present situation but it will not address the challenges of the present situation unless it is backed by a clear strategy on how to overcome the challenges of today.

In fact, unrealistic optimism can kill the innovative spirit and paint a future that does not exist. Hopefully, scholars will someday study the impact of our religion on our personal well being.

 

Anthony Osae-Brown