COVID-19: Confidence in Nigeria’s economic recovery less optimistic – McKinsey

Consumers and investors in Nigeria’s economy are becoming less optimistic about the country’s recovery prospects than they were in March, despite relaxations in lockdown conditions and reopening of the economy.

This is according to a recent survey by McKinsey, a global consulting firm, which revealed that the confidence rate dipped 800 basis points as the percentage of respondents hopeful about an immediate rebound from COVID-induced economic crisis fell to 40 percent in June from 48 percent in March.

“A higher proportion of consumers witnessed a decrease in income, savings, and spending levels. They intend to be mindful of spending in the coming weeks and are on the lookout for savings while increasing spending on essentials, entertainment, and fuel,” said the survey titled ‘Nigerian consumer sentiment during the coronavirus crisis’.

The survey data collected from June 16-18, 2020 check back for regular updates on consumer sentiments, behaviours, income, spending, and expectations.

The impact of the pandemic on employment and income of Nigerians has been widespread, according to a maiden report of the COVID-19 pandemic impact monitoring survey by the National Bureau of Statistics (NBS).

The survey which captured responses from 1,950 households showed that 42 percent of the respondents, who were working before the outbreak, reported they were not working due to the pandemic. Some 79 percent of the respondents reported that their total income has decreased since mid-March, with many struggling to keep up with the purchase of staple food like yam, rice, and beans.

Further findings from the McKinsey survey showed that for June, 43 percent of the respondents had mixed feelings that the economy will be impacted for six-12 months or longer and will stagnate or show slow growth thereafter, compared to the 39 percent of respondents for March.

Some 17 percent of the respondents for June said COVID-19 will have a lasting impact on the economy and show regression or fall into lengthy recession, compared to the 13 percent for March.