Seventy-seven percent of Ghanaians are experiencing substantial stress on their livelihoods due to the escalating cost of living, affecting their daily lives and consumer behavior.
Recent data from Maverick Research and Kasi Insights highlights this concerning trend for consumers and the Fast-Moving Consumer Goods (FMCG) industry.
This figure illustrates the profound pressure inflation is exerting on households, diminishing purchasing power and forcing challenging spending decisions.
“The new data indicate that Ghana and Nigeria are at the forefront of this economic stress. With a staggering 81% of respondents in Nigeria and 77% in Ghana reporting significant stress due to rising costs of living, the impact on daily life and consumer behavior is profound. This statistic underscores the severe strain that inflation is placing on households, eroding purchasing power and compelling difficult choices in spending”.
Economic Strain and Consumer Behavior
The report indicated that consumer feedback gathered since the start of the year underscores a noticeable anxiety among retail owners and customers, now substantiated by this recent research.
“The financial squeeze is not merely anecdotal but a widespread reality affecting a vast majority of the population. In Ghana and Nigeria, where inflation rates are particularly high, the stress manifests in reduced disposable income and altered consumption patterns. Consumers are forced to prioritize essentials, often cutting back on non-essential goods and services”, it mentioned.
“This shift in consumer behavior has significant implications for the FMCG industry. Companies operating within this sector are finding it increasingly challenging to maintain sales volumes and profitability”, it added.
The report further noted that the pressure on household budgets necessitates that brands innovate to stay relevant and accessible to their customers.
It added that pricing strategies, product sizes, and promotional tactics are all being reevaluated as businesses strive to adapt to the new economic realities their consumers are facing.
The Regional Perspective
Beyond Ghana and Nigeria, the impact of inflation is being felt to varying degrees across other African nations.
In Kenya, 61% of respondents report high stress levels, while in Tanzania, the figure is 59%. Although these percentages are slightly lower, they still indicate that a significant portion of the population is grappling with economic pressures.
Countries like Tunisia and Uganda show similar trends, with over half of their populations reporting substantial stress.
Interestingly, the data revealed that regions less affected by extreme inflationary pressures, such as South Africa and Egypt, report relatively lower stress levels at 2% and 7%, respectively. This disparity highlights the uneven economic landscape of the continent, where some nations are more resilient or have better mechanisms to manage inflation and its impacts.