Nigerians are increasingly deferring major purchases such as cars, homes, and household appliances as high living costs and elevated borrowing rates continue to squeeze household finances, according to the latest Household Expectations Survey by the Central Bank of Nigeria (CBN).
The survey, released in July 2026, revealed that buying conditions for motor vehicles, consumer durables, and buildings and landed property remained well below 30 points, indicating that consumers generally considered the period unfavorable for major purchases. The findings suggest that despite recent moderation in inflation, households remain focused on essential spending, with limited disposable income available for discretionary purchases and long-term investments.
Consumer Sentiment Index Drops
The CBN reported that the Consumer Sentiment Index for average prices of selected items declined to 24.3 points in July from 28.9 points in June, indicating a modest easing in consumers' perception of price pressures. However, this remains below the neutral threshold, reflecting persistent concerns about affordability.
Buying conditions stood at 28.7 points for motor vehicles, 28.9 points for consumer durables, and 30.0 points for buildings and landed property. Willingness to purchase was even weaker, with motor vehicles at 18.7 points, buildings and landed property at 19.2 points, and consumer durables at 24.4 points.
Negative Outlook for Major Purchases
House purchases recorded an outlook index of -56.9, while cars and motor vehicles stood at -56.3. Household appliances and other durable goods recorded -36.8, while investment intentions stood at -35.7 and rent at -24.6. These negative values indicate that more respondents expect conditions to worsen rather than improve in the near term.
The CBN noted that expectations across most spending categories could improve modestly over the next six months, although current consumer sentiment remains subdued. “The Buying Conditions Index for major purchases remained below the 50.0 threshold throughout the review period, indicating that a majority of respondents considered the prevailing environment unfavorable for purchases of consumer durables, vehicles, and buildings or landed properties,” the report stated.
Inflation and Borrowing Costs Weigh on Sentiment
The survey also showed that consumers remain concerned about inflation and borrowing costs. Consumer Outlook Index readings for expected price changes stood at 23.3 points over the next three months and 25.0 points over the next six months, indicating expectations of continued price pressures.
Additionally, 63.4% of households said the Nigerian economy would deteriorate if inflation accelerated beyond its current pace. Meanwhile, 35.6% of respondents expected bank lending rates to increase over the next three months, while 57.2% preferred interest rates to decline. At the same time, 46.5% acknowledged the need for higher interest rates to help contain inflation.
Food Remains Top Spending Priority
Food remained the biggest spending priority for households, with other major expenditure areas including household goods, education, transportation, electricity, and water. This spending pattern shows that consumers continue to prioritize necessities over discretionary purchases.
Nigeria's headline inflation eased marginally to 15.91% in June 2026 from 15.93% in May, according to the National Bureau of Statistics. Despite this slight moderation, the cumulative effect of previous price increases and high interest rates continues to constrain household budgets.
Economists suggest that the deferral of major purchases could have broader implications for economic growth, as consumer spending is a key driver of demand in sectors like real estate, automotive, and manufacturing. The CBN's survey underscores the delicate balance policymakers face in managing inflation while supporting economic activity.
