Trouble as report shows Nigerians compile debt amid economic hardship worsens

• Because of the rising cost of goods and services, Nigerians are spending their savings and taking on debt
• In July 2024, most consumers had a negative outlook because they anticipated running out of money or getting into debt.
• Meanwhile, respondents voiced hope for improved economic conditions and more income in the ensuing six months

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Nigerians are spending their savings and accruing debt due to the rising prices of goods and services, despite the optimism of many.

Respondents voiced confidence about improved economic conditions and increased income in the upcoming half year. Photo Credit: Contributor
Source: Getty Images

According to the Central Bank of Nigeria's (CBN) July Household Expectations Survey which gauges consumer expectations, the general consumer view in July 2024 was pessimistic, as consumers expected depleting their savings or incurring debt.

However, in the next six months, respondents expressed optimism about a better economic circumstances and rising income.

The study, which was performed from July 22–26, 2024, with a 99.7% response rate from a sample size of 1,665 people, revealed that, on average, more families anticipate higher spending on necessities throughout the whole review period.

The majority of customers said that buying expensive goods such consumer durables, cars, and buildings and landed properties would not be the best use of the review period. In a same vein, they predict that the Naira will weaken and that this month's borrowing, inflation, and unemployment rates would all increase.

In addition, the families who responded felt that if prices increased more quickly than they now do, the economy would ultimately become weaker rather than better. Most respondents said that if they had to choose between interest rates and inflation, they would rather have lower interest rates.

Customers predicted better economic circumstances and higher family incomes in their view for the next six months, giving it a 2.7-point index. In July 2024, the consumers' overall outlook improved somewhat, rising by -41.7 points from the previous month.

This shows that even though the mood was gloomy, fewer persons than the previous month indicated gloom.

The deteriorating state of the economy, the deteriorating financial status of families, and the projected drop in family income throughout the review period can all be blamed for the month's forecast.

The next month and the following three months were predicted to see continued pessimism during the review period, with indices of -21.8 and -9.1 points, respectively.

Nigeria's Inflation Rate to Hit 33.95 Per Cent

Legit.ng reported that as evidenced by the rising cost of goods and services, Nigeria's inflation rate rose to 33.95% in May 2024, according to the latest report by the National Bureau of Statistics (NBS).

According to the NBS Consumer Price Index report published on Saturday, June 15, this marks a 0.26% increase from the April 2024 headline inflation rate of 33.69%.

The data shows that on a year-on-year basis, the headline inflation rate was 11.54% higher than the 22.41% recorded in May 2023.

Source: Legit.ng