Nigerians expect to spend their savings or incur debt over the declining financial situation, according to a recent report by the Central Bank of Nigeria (CBN).
In the report titled; “July 2024 Household Expectations Survey”, Nigerians were pessimistic about the economic situation over the next three months.
“At -9.1 points, consumers’ overall confidence was pessimistic for the next three months. This is attributed to declining economic conditions and declining family financial situation as consumers opined that they will be drawing down on savings or getting into debt. They, however, anticipate improvement in the total family income as the index stood at 1.6 points,” the report stated.
The survey, which was done in July 2024, sampled 1,665 households and had a 99.7 response rate.
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Respondents also expected inflation to continue rising in August 2024, and three months after. However, the prices of goods may begin to moderate after six months, the report stated.
“Drivers of inflation for the next three months were Transportation (69.3), Purchases of Car/Motor Vehicle (68.7 points), Medical Expenses (67.3 points), Rents (67.1 points) and Purchase of House (67.0 points),” the report stated.
Households also expect to spend over 50 percent of their income on food and household items, while seeking to cut costs on big purchases such as vehicles, houses, home appliances, savings and investments.
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“This trend is expected to continue into the next three months as consumers expect to spend a substantial amount of their income on similar items: Food and Other Household Items (56.0 points), Education (35.2 points).”
“Additionally, they do not plan to spend a substantial income on Investment (-45.6 points) and Savings (-33.8 points). This reflects their family’s financial situation in the current month and reaffirms their stance that they will be drawing down on their savings or getting into debt,” the report stated.
Although Nigerians did not expect to make big purchases like landed properties and houses in July and August, the optimism to do so in six months was higher.
“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.
