Updated Chicken Bucket purchasing power parity study across African countries provides a fact-based understanding of currency issues in the continent

July 27th, 2016. Sagaci Research, the leading independent pan-African market research and market intelligence firm, has published an updated version of their study on Purchasing-Power-Parity (PPP) among African countries, named “The Chicken Bucket Index”. Inspired by the world renowned Big Mac Index, Sagaci Research has leveraged the presence of KFC™ in 18 African nations to develop the KFC Index of African currencies valuation.

In Q1 2016, Sagaci Research analysed the prices of the Original Chicken Bucket from KFC™, covering countries in the North, East, West and South of Africa. This enabled Sagaci Research to become the only company providing insight on African currency valuation and consumer purchasing ability relative to the US, and selected European countries. The Index is a strong fact-based indicator that gives real time, tangible updates of the financial situation of African countries.

As per the report, average costs of the same product vary widely from country to country, indicating a disparity in real vs. implied currency exchange rates. The highest prices in comparison to US based prices are found in both Angola and Morocco, whose currencies are estimated to be overvalued by +28% and +6%, respectively, a decrease from +72% in Angola in Q1 2016, where prices have increased by a remarkable 25% in 3 months . On the other hand, the lowest prices are found in Lesotho and South Africa, whose currencies are both undervalued by -55%. The KFC Index also shows that the Nigerian Naira has moved from being overvalued by +8% in Q1 to being undervalued by -27% in Q2, with its currency devaluating by a striking 42% over the same period, while the Mozambican Metical suffered a decrease of its value of 23%, plunging its undervaluation to -38% in Q2, as opposed to an overvaluation of 4% in Q1. Moreover, the report shows that in the past 3 months, currencies have further depreciated on the black market in Egypt and Angola by 33% and 32%, respectively, creating an index of -64% for Angola compared to a +28% using official rates.

The report will be published quarterly to track the changes in consumer prices and currency exchange rates, and hereby shedding light on economic performance, inflation and monetary policies.

Report and index data can be found on the Sagaci Research website: KFC Index

 

About Sagaci Research

Sagaci Research is the leading independent market research / market intelligence firm dedicated to African markets. The firm, founded in 2012 by former consultants from The Boston Consulting Group (BCG), conducts field studies in over 20 countries in Africa and publishes reports and databases on retail, consumer goods and household consumption topics.

As of today, Sagaci Research operates subsidiaries in Algeria, Angola, Egypt, Ivory Coast, Ghana, Nigeria, Chad, Kenya, Tanzania and Mozambique and is the exclusive supplier of high-quality data and information on African economies for leading multinational companies and investors.