CONSUMER SENTIMENTS
Consumer Sentiment Strengthens In September As Signs Of Slowing Inflation Emerge
By Yannick Lefang
KASI ’ s global CCI advanced by 10 points in September after receding by 5 points in the preceding month . While the index of future expectations gained 15 points , the index of current economic conditions fell by 3 points .
Generally , there was positive movement in the household indices considered . With the exception of the discretionary spending and job prospects indices which stumbled by 4 and 3 points respectively , all the other household indices heightened in September . The household income index recorded the largest increase of 19 points , while the purchasing power and household budget indices rose by 13 and 16 points respectively . Meanwhile , the general economic conditions indices for both the city and country strengthened by 15 and 14 points respectively .
Examining the countries tracked , there was optimism among consumers in majority of the countries analysed . Ivory Coast , Kenya , Nigeria , South Africa and Tanzania all saw an improvement in their consumer sentiment indices with South Africa ’ s index undergoing the largest expansion of 59 points . On the other hand , Cameroon and Ghana witnessed a deterioration in the consumer sentiment indices for their countries with Ghana recording the biggest loss in consumer confidence as its index shrunk by 10 points .
After moving into negative territory in August , consumer sentiment bounced back into positive territory in September as the index accelerated by 10 points climbing from 3 to 7 . The rebound in consumer sentiment can be primarily attributed to the index of future expectations which surged by 15 points . Meanwhile , the index of current economic conditions continued on the downward trend observed last month with the index slipping by an additional 3 points this month .
Inflationary pressures remain to be the challenge across countries in Africa and the world . In Nigeria for example , the Consumer Price Index ( CPI ) report shows that inflation hit a new 17-year high after climbing to 20.77 % in September from 20.52 % in August . Similarly in Tanzania , its inflation rate rose to a five-year high of 4.8 % in September compared to 4.6 % in August however , it is still the lowest rate in the East African region .
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While slowing inflation is good news for African economies , the current rates are still above the target range for majority of the central banks . This means that central banks are likely to continue raising rates until inflation comes down to the target levels which is bad news for borrowers .
Nevertheless , an examination of the month to month change in inflation suggests that prices may be stabilising . Once again , turning to Nigeria , its CPI report indicates that , on a month-on-month basis , the CPI expanded by 1.36 % in September compared to the 1.77 % increase recorded in the previous month . This is also the case in Tanzania where , despite a rise in inflation of 0.1 % between August and September , inflation had dropped by 0.4 % between July and August . This stabilisation in prices could explain why the magnitude of the decline in the index of current economic conditions this month is smaller than that of last month .
As illustrated by the index of future expectations there is optimism among households on the future of the economy . This optimism is also reflected within the business community in some countries . A CEO Survey conducted by the Central Bank of Kenya ( CBK ) in September 2022 revealed that business confidence for the next 12 months rose a year-high of 61 % from 52 and 51 % in July and May in spite of soaring inflation . This renewed investor confidence for Kenya comes after the country went through a peaceful general election period in August , as well as new business prospects in the country ’ s green economy , agriculture , manufacturing and motor industries .
Some countries in the region are also undertaking structural reforms to support future economic growth . For example , Nigeria , with support from the World Bank , has launched a USD 750 million Nigeria State Action on Business Enabling Reforms ( SABER ) Program whose objective is to improve ( 1 ) the efficiency of land administration , ( 2 ) the regulatory framework for private investment in fibre optic infrastructure , ( 3 ) services provided
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