points to 22 %; the biggest increase since 2002 .
All these developments are certainly having a negative impact on consumers ’ perception of current economic conditions and the future state of the economy as revealed by the indices trailing the two aspects .
Real wages diminish and household expenditure softens amid rising inflation and interest rates
The negative sentiment of the current and future conditions is reflected in the performance of the household indices all of which deteriorated this month . Households indicated their pessimism in general economic conditions for both the city and country as the indices focused on these two elements shrunk by 2 and 1 point ( s ) respectively . Job prospects also waned in August as the index sunk by 7 points from -47 to -54 thus erasing all of the gains from last month . The expenditure situation got worse for households this month . Following an expansion of 6 points in July , the discretionary spending index withered by 12 points falling from 5 to -7 hence attaining the lowest level for 2022 .
Additionally , the purchasing power for households plummeted further as the index gave up another 4 points , dropping from 3 to -1 , and landing in negative territory for the first time since September 2020 . Concerning the income indices , their
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For businesses that believe the status quo is sustainable , it will become increasingly difficult to pass on the rising cost to consumers and they will feel the impact on their top line but also their bottom line .
performance was also disappointing . The household income index slid by 2 points while the personal finance index declined by 6 points .
Evidently , the soaring inflation has affected households as their real wages have diminished significantly leading to cutbacks in expenditure . To make matters worse , the higher interest rates means that the option for borrowing is no longer feasible due to the amplified interest payment costs associated with borrowing .
Consumer confidence in South Africa reaches an all-time low while peaceful elections in Kenya causes sentiment to strengthen
With respect to the countries considered in the index , Nigeria , South Africa and Tanzania all saw consumer sentiment in their countries fade with South Africa ’ s index recording the biggest slump of 39 points . Meanwhile , consumer sentiment heightened in Cameroon , Ghana and Kenya with Kenya ’ s index experiencing the largest gain of 8 points . In Ivory Coast , consumer confidence stagnated at last month ’ s level .
Consumer confidence in Kenya accelerated by 8 points in August ascending from -2 to 6 . The improvement in consumer sentiment is a reflection of renewed optimism among Kenyans especially on current economic conditions which , after weakening by 4 points last month , expanded by 9 points . At the same time , the index of future expectations advanced by 7 points reaching the highest level since February .
August was a decisive month for Kenya , as the country held presidential elections to elect the country ’ s fifth president since independence . Despite fears among the international community on the possibility of election-related violence , the process was extremely smooth with virtually no reports of violence in the country . This was great for businesses in the country particularly those located in the city as their property was not looted .
Surging inflation and climbing interest rates dampen consumer sentiment in August
Consumer sentiment in Africa receded by 5 points in August following a modest rebound in the previous month .
+ 20 Feb 2020 Africa records first case of COVID-19
Feb 2022 Ukraine war started with Russia invasion
-30 2016 2017 2018 2019 2020 2021 2022
Monthly surveys conducted amongst representative sample of 4,000 urban dwellers in an unweighted margin of +/ - 1 %
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