Nigeria consumer spending outlook

Nigeria, the most populous country in Africa, is poised to become the continent's leading consumer market, with projections showing a significant rise in consumer spending in the coming years. According to the Mckinsey Global Institute, Nigeria is expected to control 15 percent of the overall growth in consumer spending by 2025, highlighting the country's potential for economic expansion. Robert Aderinmola, Market Intelligence Officer at Diamond Bank, shed light on the outlook for household consumption expenditure in Nigeria during a recent interview on CNBC Africa. Aderinmola pointed out that despite economic challenges such as inflation and unemployment rates, indicators suggest a positive consumer spending trend in the country. Notably, gross disposable income in Nigeria grew by 0.26 percent to 7.91 trillion Naira in the first quarter of 2018, indicating an increase in buying power for Nigerian consumers. This growth is expected to continue, with forecasts predicting a total consumer expenditure of around 100 trillion Naira in 2019. The rising national disposable income and employee compensation are contributing to this positive outlook, particularly among the young and affluent demographics in urban areas. Aderinmola explained that while Nigerians face high poverty rates and increasing population numbers, the growing middle class and young population are driving consumer spending in the country. The urbanization trend in Nigeria, with over five billion people living in urban areas, is also expected to boost consumption across various sectors like food and beverages, transportation services, beauty products, and housing. The 'affluence' and 'global consumer' categories are anticipated to be key drivers of consumer spending by 2025, with projections indicating significant growth in these segments. Despite the economic disparities and challenges faced by the country, Aderinmola emphasized that a positive macroeconomic outlook following the 2016 recession is paving the way for increased consumer spending. The recent performance in the consumer expenditure sector, with a notable growth in the fourth quarter of 2018, is indicative of a forthcoming surge in consumer spending. Aderinmola highlighted that while the second quarter of 2018 saw relatively subdued growth, the momentum picked up in the fourth quarter, pointing towards a positive trend for the future. With expectations set high for 2019 and beyond, Nigeria's consumer spending landscape is poised for significant growth, driven by various consumer segments and urbanization trends. Despite the challenges posed by economic factors like inflation and poverty rates, the country's demographic dividend and improving macroeconomic conditions are steering Nigeria towards becoming a dominant consumer market in Africa.