Nigerians Worry Over Increasing Household Debt, Drain On Savings

Nigerians are worried over increasing household debt or drawing down on their savings, on account of the biting economy, a survey by the Central Bank of Nigeria (CBN) has shown.

The survey which covers the month of July, has shown that many Nigerians expect increased expenditure on basic commodities and services across all periods.

This is due to the value of the Naira depreciating, while borrowing rate, inflation rate and unemployment rate continue to soar.

These conclusions were drawn from the outcome of the July 2024 Household Expectations Survey comprising the Consumer Expectations Survey (CES) and Inflation Attitude Survey (IAS) conducted during the period of July 22-26, by the CBN.

The CBN says the survey had a response rate of 99.7 percent, with respondent households believing that the economy would end up weaker rather than stronger if prices rose faster than they did currently.

According to them, this is not an ideal time to purchase big ticket items like consumer durables, motor vehicles, and buildings & landed properties.

Aside increased household debt, other highlights from the survey are as follows:

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“Given a trade-off between Inflation and Interest Rate, the majority of respondents said they would prefer lower Interest Rates.

“Majority of the respondents are aware that MPC (CBN) sets interest rate and their decisions influence short-term interest rate in Nigeria”.

The CBN said consumers’ views were captured across three dimensions namely adding:

“Economic Condition, Family Financial Situation and Family Income, even as the Consumers’ overall outlook in July 2024 improved marginally at -41.7 points compared to previous month.

“This indicates 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.

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“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”.

It said respondents were however optimistic 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”.

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