Mercado Noticias

Nigeria’s consumer economy is under pressure, with 83 percent of households cutting back on discretionary purchases as inflation, weak income growth, and currency instability continue to erode purchasing power, according to Boston Consulting Group’s Africa Consumer Sentiment Survey 2025.

The pullback places Nigeria among the most financially strained consumer markets in Africa, alongside Kenya and South Africa, and highlights the depth of stress facing households across Sub-Saharan Africa.

BCG’s survey, conducted across six major African economies, shows that Africa now has a net consumer sentiment score of –23 percent, making it the most pessimistic region globally.

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In Nigeria, the impact is most visible in how households allocate spending. Essentials such as food, housing, utilities, and transport now account for nearly three-quarters of monthly household budgets, leaving limited room for non-essential items.

The report disclosed that more than four in five Nigerian consumers say they are limiting non-essential purchases, reflecting one of the steepest cutbacks recorded in the survey.

BCG attributes this behaviour to a difficult macroeconomic backdrop. “Real income growth across Africa has stagnated, and the World Bank projects that income per capita on the continent remains about 2 percent below levels from a decade ago, with only modest growth expected through 2027,” it said.

For Nigerian households, these pressures have translated into heightened financial anxiety, lower savings, and reduced discretionary spending.

Yet the report also points to a striking paradox beneath the strain. Despite widespread financial pressure, young Nigerians remain among the most optimistic consumers globally.

Across the six countries surveyed, with 119 million consumers, Gen Z consumers aged 18–27 are the most financially unstable, yet also the most hopeful. About 70 percent expect their personal financial situation to improve within the next year, even as 51 percent describe their current stability as poor.

“Nigeria is central to this demographic shift. The country already has one of the largest youth populations in Africa and is projected to add more than 20 million people aged 18–27 by 2050, reinforcing its position as a long-term consumer growth engine despite current headwinds,” it said.

The strain on spending has not eliminated demand but reshaped it. BCG’s findings show that expected increases in spending over the next six months are largely inflation-driven rather than discretionary, meaning consumers anticipate spending more because prices are rising, not because incomes are improving.

This dynamic is particularly pronounced in Nigeria, where currency weakness amplifies price pressures.

At the same time, Nigeria’s retail structure is evolving rather than collapsing. Nearly 90 percent of retail sales still occur through traditional channels such as kiosks and open markets, but digital platforms increasingly shape discovery and purchase decisions

Social media now rivals word-of-mouth as a key influence on what Nigerians buy, positioning platforms like WhatsApp, Instagram, and TikTok as critical commercial touchpoints, the report disclosed.

Financial inclusion is also reshaping consumer behaviour. The report shows that around 60 percent of adults in Sub-Saharan Africa now hold a financial account, up from about 192 million people in 2014 to roughly 444 million in 2024, driven largely by mobile money adoption

This expansion is enabling younger Nigerians to participate more actively in digital commerce, even as overall spending remains constrained.

BCG noted that Nigeria’s consumer story is defined by tension: severe short-term pressure alongside powerful long-term potential.

“A young, digitally connected population continues to reshape how goods are discovered, paid for, and distributed. For businesses and policymakers, the challenge is navigating the strain without losing sight of the demographic forces that will ultimately define Nigeria’s consumer future,” it said.