Nigerians, Africans confident of tomorrow, survey

The emerging affluent consumers in Nigeria and the rest of Africa are confident about their market’s growth prospects, typified by high expectations in income rise, achievement of long term wealth goal and defined spending plans, according to a survey by Standard Bank.

The survey which targeted 7,000 emerging affluent consumers across seven of the bank’s markets, Nigeria, Hong Kong, China, India, Indonesia, Kenya  and Singapore showed that 9 out of every 10 Nigerians expect  their incomes to rise in the next 12 months, with brighter prospect about their future.

However,fewer Nigerians, (47% according to the survey, owned their own homes relative to the Kenyans, 60%, reflecting cheaper mortgage financing in Kenya against Nigeria with over 16 million housing deficit.

Analysts said last night that Nigerian optimism may be based on good governance, rule of law and improvement in the ease of doing business in the country, adding that the survey provides opportunity for Nigeria to pursue the diversification of her economy, so as to enhance non oil revenue.

The optimism is coming despite the forecast by the International Monetary Fund (IMF)  of  a four per cent growth rate for Nigeria’s Gross Domestic Product (GDP) in 2015,  a  2.25 percentage points lower than its last year’s projection for the country.

In the 2015 budget, the Federal Government had initially forecast a real GDP growth rate of 6.4 per cent in 2015 but was forced to slash it to 5.5 per cent, owing to declining oil prices

Razia Khan, managing director, chief economist, Africa Global Research, Standard Chartered Bank, London said, “Nigerians were still very optimistic about future prospect. 9/10 of the people polled expected their incomes to rise in the next 12 months. The reasons why they were optimistic – better rule of law/regulation and optimism about future economic prospects. Most of the sample was self-employed.

Nigerians also expressed an intention to save more of their incomes next year – from the low 20s this year to over 30%.

Medium-term financial goals were set on buying a property. Fewer of the Nigerians polled (47%) owned their own homes relative to the Kenyans (60%). I wonder about the extent to which this reflects a longer history (and cheaper) mortgage financing in Kenya.”

Friday Ameh, energy analyst, said last night that the survey confirms the resilience of the economy and Nigerians themselves, adding that what the government needs to do is to formalise most of the items in the informal sector for inclusive growth

The survey also showed that in Nigeria, the top economic goal of the emerging affluent was identified as buying property and most are confident they will attain this goal in 10 years.

However, among customers in India, Nigeria and Indonesia where confidence is high, Nigerian customers ranked the highest in confidence, with a staggering 88 per cent saying they expect their incomes to rise next year.

The study of 7,000 emerging affluent consumers across the seven markets, offers new insights into the confidence levels, income expectations, saving plans, short and medium-term spending priorities, and long-term aspirations of people with rising incomes living in large cities.

A key finding in the study is a high level of confidence among the emerging affluent when it comes to the 10-year wealth goal. Respondents in six of the markets – Hong Kong, China, India, Indonesia, Nigeria and Singapore – say buying property is their top long-term financial aspiration, while launching their own business is the number one goal for the emerging affluent Kenyans.

“Whether the 10-year wealth aspiration is to buy property or launch a business, on average, as many as 87% of the emerging affluent believe they will achieve it. The figure is considerably higher in the developing markets, with 100% of Nigerians and at least nine in 10 Kenyans, Indians, Indonesians and Chinese saying they are confident about achieving their long-term financial goal, the survey said.

Karen Fawcett, Chief Executive Officer, Retail Banking, Standard Chartered, said: “At a time when many people are worried about the global economy, this study suggests it feels very different on the ground in Asia and Africa. These emerging affluent consumers are confident, ambitious and are driving wealth creation, which supports the long-term outlook for growth across these markets.”

The report further showed that about 65% of the emerging affluent have seen their household disposable income rise in the past year, adding that this trend is set to continue, with an average 72% expecting their incomes to rise in the next year.

“The figure is far higher in Nigeria (88%), India (88%) and Indonesia (82%),” said the survey.

Ninety-eight percent of the emerging affluent Chinese own property, while in Nigeria fewer than half, 42% are believed to own property and another 8 per cent in Nigeria own more than two properties: 18% of the emerging affluent Indonesians own more than two properties, while in Hong Kong 3% do.

According to the report, “In Nigeria as in China, India and Indonesia, the emerging affluent said while spending on international travel is not priority in the next year, this need could take up the top three spots in their preference list over the next three years.”

John Omachonu