January 22, 2021, 17:00 PM --
Positivity regarding current conditions during the holiday season still dampened by low job prospects
Kenyans express positivity about the future with both the economic healing and vaccines becoming available by early February
The common outlook was that retail took a significant hit in 2020 but weaker market conditions benefited some
In the month of December, Kenya’s consumer confidence index (CCI) saw an 8-point increase, taking the index value from -8 to 0. This was led both by the increase in consumer expectations as well as an increase in the index of current conditions which increased 8 and 5 points respectively. Overall, the sentiment was rather positive in Kenya as the year was coming to an end.
Positivity regarding current conditions during the holiday season still dampened by low job prospects
The index of current conditions increased 5 points going from an index value of -36 to -31. This increase was led by an increase in optimism regarding making large purchases. The sub-index measuring this sentiment increased 13 points, taking the value to a positive value of 1. While November was coined the darkest month as a result of a drastic rise in COVID-19 cases, the curve has relatively flattened once again. Confirmed cases touched a total of 96 139 in December with 138 new recoveries and 147 new cases recorded on the 29th of December. This is a tremendous drop in daily average cases recorded for in November, daily averages were between 700-1500 cases which decreased to under 500 daily cases in December.
As per our COVID-19 Pulse survey, fear fell 7%, falling to a value of 61.81%. In fact, compared to November, a larger percentage of respondents expect life to go back to normal within the next 3-6 months and fewer people expect it to still be over a year. However, there hasn’t been much of a change in sentiment regarding where the crisis is headed. In summary, compared to the month of November, 4% more people think the worst of the crisis is over and 2% fewer people think the worst is happening right now. There was a 2% increase in people who think the worst is yet to come which brings the total percentage of respondents who feel the same to 19%. The majority opinion, however, at 53% of respondents is that the worst is happening right now.
Though the ICC increased in December, the value of the index remains negative due to the continuous low sentiment surrounding job prospects, the index for which fell 2 points from -61 to -63. Month over month, Kenya has continuously seen a drop in employment rates. The job crisis continues to play a prominent role in the Kenyan economy. Ever since the pandemic hit, millions of Kenyans have lost their jobs and continue to struggle to make a living. The majority (66%) of our COVID-19 Pulse survey respondents indicate that job search has become harder ever since the beginning of the pandemic. With parents struggling to make enough money, there is the fear of the possible impacts this may have on children in the future. With the lack of funds, it is expected that literacy and education rates may fall as fewer students become able to afford to go to school. According to AP News, children have been turning to prostitution and child labor, wielding hammers and picking through garbage.
Kenyans express positivity about the future with both the economic healing and vaccines becoming available by early February
On the other hand, Kenyans are extremely positive about the future. The index of future expectations saw an 8-point increase in December, taking the value of the index from a value of 4 to 12. This month respondents felt that general conditions within the country and their cities should improve with sub-index values rising 8 and 12 points respectively. Additionally, positivity surrounding an increase in household income and ability to meet regular expenses caused the respective sub-indexes to increase 11 and 13 points respectively. Overall, the sentiment is rather high for the future.
This could be led by the flattening curve of daily COVID-19 cases recorded as well as the recent announcement of secured vaccines for Kenyans. According to Kenya’s health minister, the country is expected to start receiving 24 million doses of the vaccine developed by AstraZeneca and Oxford University in February. Health workers and teachers will have priority for the vaccines, and they will be offered to citizens on a voluntary basis.
Year-end reports of the economy’s health may have contributed to the feeling of positive sentiment regarding future conditions. Despite all the hardship faced by the economy, Kenya came out the strongest in eastern Africa, being the largest economy at a GDP of $109 billion. Kenya is also the 4th largest economy as measured by GDP in all of sub-Saharan Africa. Kenya is also the only country to have significantly reduced poverty and has gone from a low-income to middle-income average bracket.
The common outlook was that retail took a significant hit in 2020 but weaker market conditions benefited some
Over the course of 2020, the retail industry in Kenya took a large hit due to weakening economic conditions causing limited discretionary spending. The retail sector saw a large contraction in sales and many retail giants such as Shoprite were forced to exit the market. It was not all negative though. It was seen that while many in the retail industry suffered, branded fashion brands in Nairobi tripled their sales because of the pandemic. Redirected demand due to international travel bans instead caused increases in purchasing of luxury international branded items. Aside from this, some retail giants such as Carrefour took advantage of weaker market conditions to expand not only in Kenya but in Tanzania and Uganda as well. In 2020, retail was hit the hardest but increasing optimism and improving economic conditions may indicate a brighter outcome for 2021.
By Tanya Gandhi, Economic Intelligence Group at KASI.
#coronavirusafrica#coronavirusblackpeople#covid19#Kenya#Cameroon#Nigeria#Ghana#IvoryCoast#Tanzania#SouthAfrica
About the methodology
KASI Consumer Confidence Score (KASI CCI) is a composite index compiled from a seven-question survey that runs monthly via our consumer polls in the countries covered. The data output is based on a fresh, randomly selected representative sample of city dwellers aged 18-64. Released the first week of every month, KASI CCI provides a focused view on consumer perceptions in seven African urban centers (Ghana, Nigeria, Kenya, South Africa, Cameroon, Ivory Coast, Tanzania) where most spending in the continent is concentrated.
For each question, the final metric will be a ‘balance measure’ of the percentage of positive responses minus the percentage of negative responses. The overall metric will be an average across all the questions.
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