Sandra Beldine Otieno
September 6, 2023
In June 2023, Kasi Insight revealed a surge of positive consumer sentiment among Ghanaians, registering an impressive 44 points on its Index of Consumer Sentiment (ICS). This monthly index assesses consumers' confidence in the economic landscape by scrutinizing various facets, including their personal financial standing, perceptions of prevailing economic conditions, and outlook on the future economic landscape. It serves as an invaluable tool, shedding light on the intricate interplay between consumer sentiment and spending patterns. When sentiment leans positively, it often translates into heightened consumer expenditures, while negative sentiment frequently leads to more restrained spending, as reflected on the index scale, spanning from +100 to -100.
As the holiday shopping season steadily approaches, the prevailing positive sentiment among Ghanaians assumes paramount significance. This is particularly true for the younger generations, Gen Z and Millennials, who play a pivotal role in shaping the dynamics of the forthcoming holiday shopping season. Their confidence and willingness to participate in this seasonal shopping extravaganza can exert influence on retail sales and overall economic activity. As a result, retailers are eagerly anticipating the active engagement of Gen Z and Millennials during this holiday season, recognizing their sentiments as pivotal in determining the success and prosperity of this festive retail period.
From August 2017 to January 2020, Ghana grappled with a severe banking crisis, causing both Millennials and Gen Z to experience a sense of pessimism. During this period, sentiment levels were consistently low, with Millennials reaching as low as -7 and Gen Z hitting -13 in January 2020. However, the situation took a dramatic turn in March 2020 when the global COVID-19 pandemic added to the uncertainty, causing sentiment to plummet even further. Millennials dropped to -47, and Gen Z to -43. Despite these daunting challenges, December 2020 brought Ghana’s general elections, resulting in the re-election of President Nana Akuffo-Addo. This political stability seemed to provide a sense of reassurance, gradually stabilizing sentiment. In 2021, Millennials had an average sentiment index of 10, while Gen Z averaged 2. Gen Z’s sentiment exhibited noticeable volatility, fluctuating within a 14-point range, whereas Millennials had a milder 7-point fluctuation. This suggests that Gen Z’s sentiments were more unstable and subject to rapid changes compared to Millennials.
In February 2022, the outbreak of the Russian-Ukraine war introduced new global factors, including inflation and rising living costs, which did affect sentiment, albeit not as dramatically as the initial shock of the pandemic. Sentiment figures stood at -1 for Millennials and -17 for Gen Z. By June 2022, Ghana was entering a period of COVID-19 recovery, coinciding with a more positive outlook among both Millennials and Gen Z. Sentiment improved, reaching values like 6 for Millennials and 4 for Gen Z. The gradual return to normalcy likely contributed to this positive sentiment. In a surprising turn of events, December 2022 saw the opposition leader, John Mahama, declare Ghana bankrupt, introducing a new layer of economic uncertainty. Yet, consumer sentiment remained relatively positive, with figures like 16 for Millennials and 0 for Gen Z. This resilience suggests that, despite challenges, both generations held a certain level of optimism. In the first half of 2023, sentiment has continued to remain positive for the two generations, with an average of 20 amongst Millennials and 14 amongst Gen Z. This indicates an ongoing sense of optimism among these age groups.
During the banking crisis, sentiment remained relatively stable, with values at 22 for Millennials and 8 for Gen Z in January 2020, showing cautious positivity despite the crisis. However, the emergence of the COVID-19 pandemic led to a significant drop in personal finance confidence, with sentiment reaching -40 for Millennials and -26 for Gen Z, reflecting the economic uncertainties caused by the pandemic. In December 2020, the re-election of President Nana Akuffo-Addo's brought stability to personal finance confidence. Sentiment gradually improved, reaching 17 for Millennials and -4 for Gen Z, indicating that political stability positively influenced financial outlooks. The outbreak of the Russian-Ukraine war did not lead to significant fluctuations in personal financial confidence. Sentiment remained stable, with values like 3 for Millennials and -2 for Gen Z, showing resilience in the face of economic challenges.
As Ghana transitioned into a COVID-19 recovery phase in June 2022, personal finance index steadily improved, with values of 18 for Millennials and -5 for Gen Z, reflecting growing optimism as the country managed the pandemic and stabilized economically. Even in the face of adversity, such as declaration of bankruptcy in December 2022, personal finance confidence remained relatively positive, with values 17 for Millennials and 1 for Gen Z, highlighting their adaptability and resilience. In the first half of 2023, Millennials had an average personal finance index of 34, while Gen Zers stood at 21, indicating sustained positivity and a robust financial outlook among these younger generations.
Aligning campaigns with these segments’ sentiments and financial outlooks fosters year-round consumer connections
Understanding the context is crucial for brands operating in Ghana. This involves recognizing the historical backdrop and the influence of economic and political events on Millennials and Gen Z’s sentiments and personal finance confidence. By comprehending the unique challenges and experiences that these generations have faced, brands can develop more tailored and effective marketing strategies that resonate with their target audience. Whether it’s the banking crisis, the disruptive impact of the COVID-19 pandemic, or the global ripple effects of the Russian-Ukraine war, these events have significantly shaped the outlook of Millennials and Gen Z. Brands should be mindful of these factors when planning their holiday marketing campaigns, as they play a pivotal role in shaping consumer attitudes and behaviors.
Moreover, both generations have displayed commendable resilience and adaptability in the face of economic challenges. This resilience can be seen as an opportunity for brands to connect with consumers on a deeper level by emphasizing products or services that offer value, stability, or support during uncertain times. As they have demonstrated an ability to weather economic storms, brands can leverage this aspect to foster stronger year-round connections. Furthermore, targeted marketing strategies can be employed based on the specific sentiments and financial outlooks of Millennials and Gen Z in Ghana. For example, Millennials exhibit a consistently higher personal finance index, brands can craft promotions tailored to their preferences and purchasing behavior during the holiday season.
Lastly, continuous monitoring of sentiment trends is vital for making real-time adjustments to marketing strategies, especially in the lead-up to the holiday season, ensuring that brands remain responsive to evolving consumer sentiment and preferences.
Contact our team today to explore how our economic intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/request-demo/
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