Nigerian Economy Sees Decline in Consumer Spending Amidst Gloomy Outlook

The Nigerian economy is facing a challenging time as consumer spending continues to decline, leading to a decrease in electronic payment transactions. According to data from the Nigeria Inter-Bank Settlement System (NIBSS), the total value of e-payment transactions fell by 5.7% in June, marking the second consecutive month of decline.

The decline in consumer spending is attributed to the harsh economic conditions, including high inflation, which has led to a decrease in purchasing power. As a result, Nigerians are becoming increasingly pessimistic about the economy, leading to reduced spending on non-essential items.

The decline in e-payment transactions is a worrying trend, as it indicates a slowdown in economic activity. The value of NIP transactions fell by 9.0% in June, while cheque transactions declined by 27%. However, transactions via Point of Sale (PoS) and Nigeria Electronic Funds Transfer (NEFT) grew by 7.4% and 62%, respectively.

The decline in consumer spending is also affecting firms’ ability to expand production, as demand for goods and services decreases. The Purchasing Managers Index (PMI) survey report by Stanbic IBTC showed that private sector firms recorded the lowest expansion in output in seven months, due to decline in demand and intense price pressures.

The Nigerian economy is facing significant challenges, including high inflation, which rose by 32% in May, according to the National Bureau of Statistics (NBS). The increasing cost of living has led to reduced consumer spending, which is likely to continue unless there is an improvement in economic conditions.

In conclusion, the decline in consumer spending and e-payment transactions is a concerning trend for the Nigerian economy. Unless there is an improvement in economic conditions, consumer spending is likely to remain subdued, affecting firms’ ability to expand production and leading to a slowdown in economic activity.