Nigerian consumers are bracing for a significant portion of their income to be spent on essential needs over the next six months.
This is according to the July 2024 Household Expectations Survey conducted by the Central Bank of Nigeria (CBN) between July 22 and July 26.
It reveals many Nigerians plan to allocate their income primarily to food, education, and transportation.
The report read: “Spending outlook for the next six months showed that consumers plan to spend a substantial amount of their income on the following items: Food and other Household Items (54.9 points), Education (35.4 points), Transportation (30.2 points), Electricity (20.0 points) and Medical Expenses (12.2 points).”
Less spending on big purchases, investments
In contrast, the survey highlights that Nigerians do not anticipate significant spending on big-ticket items such as housing, vehicles, and appliances. The indices for the purchase of houses and cars/motor vehicles stand at -56.9 and -55.6 points, respectively, reflecting a clear intent to avoid large expenditures in these categories.
Additionally, the report shows low indices for investments and savings, with -22.6 and -9.3 points respectively, signalling a cautious approach towards financial planning in the coming months.
It noted: “On the other hand, they do not plan to spend a substantial amount of income on big tickets items such as Purchase of House (-56.9 points), Purchase of Car/Motor Vehicle (-55.6 points), Purchase of Appliances (-30.1 points). They do not intend to spend on Investment (-22.6 points) and Savings (-9.3 points).”
The CBN survey also highlights the continued economic strain on Nigerian households, as the majority of respondents foresee drawing down on their savings or incurring debt to meet these basic expenses.
Current spending outlook
The Central Bank of Nigeria’s July 2024 Household Expectations Survey further reveals a growing anticipation of increased household spending in the current month. The survey shows that the spending outlook index rose to 50.2 points, up from 48.7 points recorded in the previous month, indicating that more households are preparing for higher expenditures.
This upward trend is expected to persist over the next month, three months, and six months, with indices standing at 48.1, 46.4, and 47.5 points, respectively.
What you should know
Nairametrics earlier reported that Nigerians are bracing for tough months ahead, with many planning to rely on borrowing and depleting their savings to manage their financial obligations amid a challenging economic landscape.
The rising cost of living pushed Nigerians to borrow about N4.82 trillion from banks between January and March this year.
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