Africa poised to save and spend

For the first time, the MasterCard Worldwide Index of Consumer Confidence conducted a separate regional report for Africa, covering Morocco, Kenya, Nigeria and South Africa.

CEO for Synovate in Africa, Jon Salters, says: "Obviously these are very diverse nations and there was a huge spread in confidence across the four. However, throughout most of Africa, consumer sentiment was optimistic, with highest levels of optimism in Nigeria and Morocco."

Consumer confidence in Kenya is significantly lower than other African countries, something that Salters attributes to politics.

"Kenya's current coalition arrangement of government appears to be unstable. The current frictions have forced the country into what could be termed a permanent state of 'election politics', even with three years to the next general elections. This has increasingly affected investor confidence on sectors such as tourism - the highest GDP earner - and infrastructure development.

"Kenya also has a large proportion of citizens earning their income from agricultural related industries. The future outlook for the agricultural sector looks gloomy, especially now that the rains appear to have delayed. This will definitely affect business and consumer confidence."

Across the four markets surveyed, half of Africans expect to save more in the first half of 2010 than they did in H2 2009. This was as high as 85% in Nigeria. However, 23% of Africans expect to save less, led by 42% in Kenya.

Of those who expect to save, 71% are doing so for precautionary reasons and the two biggest saving priorities in Africa are investments (55%) and buying / upgrading home (39%).

When it comes to spending, there is more diversity across the African markets than we saw in either Asia Pacific or the Middle East.

The South Africans were most interested in fashion / accessories, Kenyans in tuition, Nigerians in buying / upgrading home, and Moroccans in dining / entertainment.

Most Africans planned to keep their discretionary spending the same as it was in H2 2009, yet Nigerians are significantly more likely to increase their spend and Kenyans to decrease their spend compared to others in the region.

The majority of Africans in all regions said they spend more than 50% of their income to household expenditures.

Forty-two percent of Africans expect to donate to charity in the first half of 2010, topped by 68% in Nigeria and 61% in Kenya. Indeed, 39% of Kenyans (the most pessimistic) expect to donate more than 5% of their next year's annual income to charity.

Nairobi-based Maggie Muringa Ireri, Business Development Director for Synovate across Africa, explains: "Kenyans have big hearts and pull together in tough times. Charity begins at home in Kenya and, because things are not entirely wonderful at the moment, people expect to share some of their income, particularly with close family and other relatives."

About the MasterCard Worldwide Index of Consumer Confidence H2 2009
This issue of In:fact is based on the MasterCard Worldwide Survey of Consumer Purchasing Priorities (MWICPP) for Asia/Pacific, Middle East and Africa, conducted by Synovate. >>MORE