The Central Bank of Nigeria (CBN) is optimistic that the overall Confidence Index (CI) on the macroeconomy would increase from 27.3 index points as at October 2019, to 59.6 index points by November 2019, a report obtained by Nairametrics from CBN disclosed.
The Consumer Expectations Survey Report, which was released by the apex bank on October 25, 2019, attributed the projection to some drivers.
They are services (32.4 points), industrial (19.9 points), wholesale/retail trade (5.5 points), and construction (1.9 points) sectors.
What it means
A positive CI indicates that respondents with a favourable view outnumber those with an unfavourable view, except for unemployment, change in prices and interest rate for borrowing money, where a positive CI indicates the opposite.
An index above 50 means more respondents indicated that it is a good time to buy assets; below 50 means more respondents believed that it would not be an appropriate time to make those purchases, and 50 means the number of respondents on both sides is equal.
What makes the report
The overall consumer confidence index is computed as the average of the three indices namely: Economic condition, family financial situation and family income.
While economic condition refers to the perception of the respondent regarding the general economic condition of the nation, family financial situation refers to the level of savings, investments, other assets including cash at hand and outstanding debts. Family income includes primary income and receipts from other sources received by all family members as participants in any economic activity or as recipients of transfers, pensions, and grants among others.
In October, the 27.3 index was driven by the opinion of respondents from services (15.1 points), industrial (9.1 points), wholesale/retail trade (2.5 points), and construction (0.5 points) sectors.
Nation’s macroeconomic performance
The growing importance of services has bolstered growth in the economy. The sector accounts for about half of GDP, dwarfing the 10% from oil and 22% from agriculture. The nation witnessed a recovery in services and industry — particularly mining, quarrying, and manufacturing.
The recovery benefited from greater availability of foreign exchange. Growth in agriculture was lacklustre, due partly to clashes between farmers and herders coupled with flooding in key middle-belt regions and continued insurgency in the northeast.