Inflation and affordability are key issues for African consumers

By our News Team | 2022

Post the pandemic, inflation costs on the continent are surging upwards – and consumers are understandably worried.

According to data released by the World Bank, sub-Saharan Africa experienced its first recession in 25 years when the Covid-19 pandemic struck. This has resulted in a difficult recovery for the region and has also brought to the fore new economic growth challenges, compounded by the Russia-Ukraine war.

In the newly released State of the African Consumer report by research company Kasi Insight, consumer sentiment highlighted two main concerns directly impacting people’s pockets and the future of their businesses, while Gen Zs (born late 1990s and early 2010s) emerged as optimistic about the continent’s future.

Consumer Insights

Crombitou via Wikimedia Commons

The report examines the current state of the African consumer as concerns around inflation, supply chain disruptions and geo-political risks increase. 

Post the pandemic, inflation costs on the continent are surging upwards, with fears of an impending recession on the cards, Kasi said in the report. 

Less than half of respondents (48%) expect economic conditions to improve over the next six months, with remaining respondents fairly evenly split between optimists who expect it to improve (27%) and pessimists who expect it to worsen (24%). 

Their main concerns relate to inflation, with the UN’s Food and Agriculture Organization (FAO) forecasting prices of necessities such as food and oil are to increase by 28% this year. 

Impact of Covid varied from country to country

“The Covid-19 pandemic’s impact on the economic performance of African countries varied, leaving many consumers on the fence about the future. The uncertainty arises primarily because the dip in the economy is hitting consumers where it hurts most – household purchasing power,” the research team noted.

“This has resulted in most consumers feeling unsure about their ability to buy necessities (food, utilities, etc.) and discretionary items (furniture, appliances, and the like).”

Half of the respondents (48%) believe that their respective country’s economic conditions will stay the same over the next six months. The same sentiment is also shown when looking at expectations around household income. Most consumers surveyed (45%) expect their household income to remain unchanged over the next six months.

When examining the financial impact further, households are finding it difficult to find a job (52%) and earn money (38%).

Gen Z are the most optimistic about their household income, with 42% expecting an improvement compared to 34% of Baby Boomers. Baby Boomers are the most optimistic about having enough money to buy necessities (48%) compared to 23% of Gen Z. The same is true for discretionary spending with 28% of Baby Boomers looking to make large purchase compared to 18% of Gen Z. 

On the job market and business front, there are shared difficulties with 11% of Baby Boomers finding it easy to source a job compared to 5% of Gen Zs. When it comes to making money, 8% of Gen Zs and Baby Boomers are finding it easier – the only thing they seem to agree on.

“To win in the world’s fastest-growing market, business and financial leaders need to have better visibility on the realities of Africa’s economies, markets and communities through the lens of consumers,” Kasi Insights observed.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.