Rising Costs: Nigerians Are Getting Into Debt, Says CBN Survey

As prices of goods and services continue to rise, Nigerians are spending their savings and getting into debt although many were, however, optimistic of improved economic conditions and increased income over the next six months.

According to the Central Bank of Nigeria (CBN) Household Expectations Survey for July which measured consumers’ expectations, overall outlook of consumers in July 2024 was downbeat, as consumers anticipated drawing down on their savings or getting into debt.

The survey which was conducted during the period of July 22-26, 2024, with a response rate of 99.7 per cent from a 1,665 sample size, showed that on average, more households expected increased expenditure on basic commodities and services across all periods under review.

Majority of consumers believed that the review period would not be an ideal time to purchase big ticket items like Consumer Durables, Motor Vehicles, and Buildings & Landed Properties.
Similarly they expected the Naira to depreciate, while borrowing rate, inflation rate and unemployment rate will rise in the current month.

The respondent households also believed that the economy would end up weaker rather than stronger if prices started to rise faster than they do now. Given a trade-off between Inflation and Interest Rate, the majority of respondents would prefer lower Interest Rates.

Consumers in their outlook for the next six months with an index of 2.7 points as they anticipated improvement in economic conditions and increase in family income. The Consumers’ overall outlook in July 2024 improved marginally at -41.7 points compared to previous month.

This indicated that though pessimistic, less people expressed pessimism compared to previous month. The outlook in the month under review could be attributed to worsening economic condition, declining family financial situation, and anticipated decline in family income in the review period. The pessimism in the review period was projected to continue into the next month and next three months with indices of -21.8 and -9.1 points, respectively.