Olufemi Adeyemi 
A recent study by the Central Bank of Nigeria (CBN) indicates a potential decline in consumer savings and investments in the near future. This trend is attributed to the increasing disparity between the prices of goods and services and the income levels of consumers.

In its ‘Household Consumer Expectation Survey Report (CES)’ for August 2024, the central bank noted that consumers do not intend to allocate a significant portion of their income towards major purchases, such as homes (-65.7 points), vehicles (-65.6 points), and appliances (-44.5 points).

Furthermore, there is minimal intention to invest (-43.7 points) or save (-33.7 points) substantially. This situation reflects their current financial challenges and suggests a potential reliance on savings or incurring debt.

This trend is anticipated to continue over the next three months, with consumers planning to spend primarily on essentials such as food and household items (70.9 points), education (43.1 points), transportation (35.7 points), electricity (24.3 points), and healthcare.

Concurrently, both businesses and households expect a decrease in the inflation rate over the next six months, while acknowledging that the current inflation rate remains excessively high.

This sentiment was captured in the CBN’s Inflation Expectation Survey Report, which indicated that a significant majority of respondents believe the current inflation level is too elevated, resulting in an index of -63.2 points.

Key factors influencing perceptions of inflation among businesses and households include energy costs, transportation, and exchange rates.

Consistent with these inflation perceptions, respondents reported an increase in their expenditures this month, as reflected by a positive index of 35.4 points.