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Africans are cash-strapped, experts react to growing inflation

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ECONOMIC experts in Africa have described the African consumer as “cash-strapped” following the inflation rise ravaging the world.

In a zoom session jointly organised by an Africa’s data intelligence platform, Kasi Insights, and research firm, Maverick Research, two experts analyzed how African consumer sentiments have shifted with the rising prices of goods and services in the sub-region, thereby affecting purchase intent.

The session was facilitated by the African Media Agency.

In their remarks, the founder and Chief Executive Officer (CEO) of Kasi Insight Inc., Yannick Lefang, and the Managing Principal of Maverick Research, Ato Micah, explained, using the economies of Ghana and Ivory Coast as case studies, how uncertainty has beclouded spending for an average African.

Lefang, during the session, titled, ‘Is Inflation Ruining the Party’, said a lot of consumers were on the fence, with the outlook uncertain, and brands needed to pay attention to the phenomenon.

Dissecting the impact of the Russia-Ukraine crisis, he said that Ghana’s consumer sentiments dropped from December 2021 to April 2022 this year. He added that something similar happened in Ivory Coast but was short-lived. According to him, Ghana’s inflation rate was 27.6 per cent in May 2022, compared to Ivory Coast’s 4.5 per cent.

Inflation rates between Ghana and Ivory Coast. Credit: Kasi Insights/ MaverickMicah .

Micah noted in the same vein, “We are coming into a situation where consumers are strapped for cash in terms of disposable income. What we are seeing is that they are either switching, swapping or squeezing.

“What we are seeing is that consumers are moving to more affordable brands within the same category. Because prices have gone up to 50 per cent in Ghana, in Ivory Coast it is 60 per cent, consumers are looking at other affordable brands they can get without sacrificing quality.”

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The economists noted that some individuals may opt for a 130 millilitres bottle of coke instead of a 150ml (swapping) just to pay lower or manage a product for longer (squeeze) so it would last.

How consumers manage inflationary measures. Credit: Kasi Insights/ Maverick

He praised brands he saw as innovating to meet consumers’ disposable incomes. Some of them he mentioned are Beta malt and Onga seasoning. He noted that Onga defeated Maggi in seasoning, while Beta malt reduced its quantity to be the most affordable malt, while retaining its quality.

Insights on business innovative tendencies in the midst of biting inflation. Credit: Kasi Insights/ Maverick

Lefang blamed supply chains disruptions for inflation in Nigeria and sub-saharan Africa, noting that inflation cannot be stopped “just like that.”

He added that the consumer might be forced to adapt to the growing trends to survive the shocks.

Already, the World Bank had said seven million more Nigerians would be poorer due to the “inflation shock” that has begun to affect the world.

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Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org

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