Consumer durables is a cataloguing of consumer goods that are not essential to be bought very often as they are fashioned in a way so as to last for an extended period of time. Profits in the consumer durables sector were most profoundly…
BMI View: Nigeria will endure an economic contraction in 2016, driven by external and domestic
challenges, exacerbated by a series of controversial monetary and fiscal policy developments. We believe
that the economy bottomed out in the second quarter of the year and, therefore, forecast a 0.8% real GDP
contraction in 2016 as a result. Furthermore, inflation has risen sharply over the past several months, and
averaged 13.3% over the first six months of 2016, rising from 9.6% in January to 16.5% in June. While this
may impact negatively on household spending, overall consumer spending patterns are unlikely to change
significantly, meaning that any increases in non-essentials spending will be driven primarily by the highestearning
Key Views And Developments
? We forecast consumer price inflation to average 15.1% in 2016, up from last year's estimated 9.0%,
stretching household budgets and reducing spending on non-essentials.
? We hold to our view that the Nigerian naira will strengthen before the end of 2016, as macroeconomic
conditions will encourage a return in investment, and therefore expect investment in the retail sector to
? Almost 2.2mn households will be in the USD10,000-plus income bracket by the end of 2016,
representing 4.1% of the total.
? Mstore owner, Dubai-based MidCom Group, announced in August 2016 that it would be investing a
further USD50mn in expanding its mobile phone and electronic goods outlets across Africa over the next
three years, including building its presence in Nigeria.
? US-based hair beauty retailer Her Imports reported in July 2016 that sales from its new store in Lagos
were four times higher than projected, following its first month of trading.