Consumption Pattern in Nigeria

EMBA 19: Economic Environment of Business Consumption Pattern in Nigeria

May 2014

Presentation by: Group 5

Consumption and Consumer Spending Pattern in Nigeria

Like most developing country, food accounts for a higher proportion of household expenditure in Nigeria

GDP at Current Purchasers’ Price (N’ Trillion)

41.2

GDP Composition (%)

C G I (X - M)

38.0 34.5 24.7 18.7 14.7 20.9 25.2

77.6%

75.2%

75.2%

63.3%

65.2%

66.2%

60.1%

2005

2006

2007

2008

2009

2010

2011

2012

2005

2006

2007

2008

2009

2010

2011

2012

Consumer Spending Pattern: Food vs. Non-Food (2009/2010)

Consumer Spending Pattern: Zonal Representation (2009/2010)

Food Non-Food

35.3% 23% 64.7% 12% 15% 30%

13% 9%

17%

12% 12% 25%

North-Central South-East North-East South-South North-West South-West

PAGE 1

19%

12%

Food

Non-Food

Source: CBN 2012 Statistical Bulletin, National Bureau of Statistics, Group 5 Calculation

47.4%

Analysing the Nigerian Consumption Data

xxx

Average Treasury Bill, Commercial Deposit & Lending Rate (%)

14 12 10 8 12 8 4 0 2005 2006 2007 2008 2009 2010 2011 2012 0.6 0.4 0.2 0.0 6,000 4,000 2,000 0 20 16 1.0 0.8

Total Savings and Average Propensity to Consume

10,000 8,000

6

4 2 0

2005

2006

2007

2008

2009

2010

APC

2011

2012

Treasury Bill Rate

Deposit Rate

Lending Rate

Savings (N'bn)

Marginal Propensity to Consume

6.0

Commentary • Positive correlation between rate of return on investment instrument and savings

4.0

•

•

Inverse relationship between APC and savings

MPC > 1 in 2007 and 2009 and < 0 in 2008, 2011 and 2012. How is the consumption financed in ‘07 and ‘09? Why didn’t increase in income in ‘08, ‘11 and ‘12 lead to increased consumption in line with Keynesian theory

2.0

0.0 2005 (2.0)

Source: CBN 2012 Statistical Bulletin, Group 5 Calculation

2006

2007

2008

2009

2010

2011...