Nigerians are fast losing confidence in the economy —CBN report

The Consumer Expectations Survey Report (CES) of the central bank for the first quarter of this year suggests that individual Nigerians as well as businesses are rapidly losing faith in the economy.

According to the document, consumers’ confidence in the economy worsened drastically between the last quarter of 2019 and the first quarter of this year, sliding from 3.3 index points to -0.3 in between the periods.

The level of optimism businesses have in the macro-economic situation of the country sank to 6.6 index points in March 2020, compared to the 26.6 recorded last month.

Pinning the negative trend to harsh economic conditions in the country, the Central Bank of Nigeria (CBN) says consumers however believe that the value of the Naira will increase in the next one year even though they fear that unemployment level will escalate in the period.

“The consumers’ overall confidence outlook dipped in Q1’20, as consumers were pessimistic in their outlook. The index at -0.3 point was 5.1points lower than the index in the corresponding period of 2019.

“Respondents attributed this unfavourable outlook to declining economic conditions. The consumers were however optimistic in their outlook for the next quarter and next 12 months with indices of 28.9 and 43.3 points, respectively,” the report states.

The CBN linked the foregoing positive expectation to the belief by Nigerians that net household income would improve, that would have the chance to save a bit or have more than enough to save.

They envisage the nation’s economy to improve in the next three months beginning from April and also in the next one year.

Regarding borrowing and exchange rate expectations, the document says “with indices of 2.2 and 11.7 points, respectively, consumers expect the borrowing rate to rise, but expect the naira to appreciate in the next 12 months.”

Concerning unemployment, it mentions that “the unemployment index for the next 12 months remained positive at 27.7 points in Q1’20, indicating that consumers generally expect the unemployment rate to rise in the next one year.”