• Thursday, March 28, 2024
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Nigerian consumers to open purse string during Easter season on improved confidence

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Nigerians could increase their spending during the Esther season than they did last year, thanks to a reduction in prices basic food items as improving economy boosted confidence.

Emeka Ike, 45, a medical practitioner with a family of four is optimistic that his family will be able to celebrate this year’s Easter much better than the previous year.

Last year, he was not able to afford a bag of rice or a live chicken, nor was he able to take his family on outings to mark the celebration. But now with food prices gradually reducing, he can afford those items he could not afford last year.

Analysts are of the view that the relative cost stability, receding inflation, a benign political environment, and expectation of a wage increase will make consumer open their purse springs.

“There was no market last year because we just came out of recession gradually, and people were still battling with prices from the companies because most of them increased their prices due to devaluation of naira so consumers were still trying to adapt,”  Yinka Ademuwagun    a consumer analyst at United Capital.

“But I feel this year should be a better year than last year, because most of the companies have been able to readjust prices and consumers have already adjusted to the prices,” said Ademuwagun.

In the fourth quarter of 2018, Nigeria’s Gross Domestic Product (GDP) grew by 2.38 percent in real terms (year-on-year). This represents an increase of 0.27 percent points when compared to the fourth quarter of 2017 which recorded a growth rate of 2.11 percent.

Inflation stood at 11.25 percent in March, compared with 11.31 percent in February, albeit lower than the 6 percent and 9 percent central bank range.

There has been a slight improvement in business confidence on the back of the successful conduct of the elections that buoyed spending.

The Business Confidence Index (BCI) for the month under review stood at 28.2 index points compared to 22.1 points in February.

The major drivers of the optimism for the current month were services (37.0 points), industrial (19.4 points), wholesale/retail trade (6.2 points) and construction sectors (2.2 points).

Similarly, businesses outlook for April 2019 showed greater confidence in the macro economy.

“Petrol prices and CPI has been treading down and this is showing positive movement in economic activities. Mostly, you would see some sort of improved demand compared to what we had last year. Looking at last year, there was not too much celebration.

A couple of retail stores that I visited said that they are running prom unlike when they could not this last year,” Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said

Some consumers are also sharing similar view.

Kayode Oseni, a photographer, said that last year was boring for him and his family as there was no money and could not afford to buy food items but that this year was different as price are lower compared to last year.

However, some consumers say there has not been an improvement in economic activities as their wallets remain squeezed.

“For me this year is dry. There is no money in circulation. If I want to enjoy my Easter, my company should my salary before Easter so that I can enjoy it,”Taiwo Bolaji, an accountant complained.

Busola Olamenin , a purchasing manager said that she does not fuss about Easter and she celebrates it with just drink. “There is no much difference for me because a pack of pespi was N950 last year and it is still the same this year,” She said.

“For now, I can’t say how celebration will be for me because businesses are just picking up from the election activities that concluded in February,” An anonymous woman said.

Nigerians are getting poorer and a lot of people cannot afford consumer products as they used to, even as the country existed a recession.

The country’s population is growing faster than the economy as evidenced in low per capita income, validating the poverty rates and low purchasing power among consumers.

A report by Steve Hanke, an economist from John Hopkins University in Baltimore, United States, has listed Nigeria, Venezuela, Iran, Brazil and others among the first 10 miserable countries in the world with Nigeria assuming the sixth position.

Easter, also called Pascha or Resurrection Sunday, is a festival and holiday celebrated once a year by Christians to commemorate the resurrection of Jesus from the dead, described in the New Testament as having occurred on the third day after his burial following his crucifixion by the Romans at Calvary c. 30 AD.

 

BALA AUGIE AND BUNMI BAILEY