Economic Reforms Drive Growth Momentum
Nigeria’s business sector is experiencing its most rapid expansion since early 2024, as economic reforms continue to yield positive results.
The latest Purchasing Managers’ Index (PMI) report by Stanbic IBTC Bank, released on Monday, revealed that the headline index surged to 53.7 in February, up from 52.0 in January. This increase signifies a strong monthly improvement in business conditions, marking the most substantial growth recorded since January 2024.
Surge in Business Activity and Demand
According to the PMI survey, February data indicated a boost in economic momentum within the Nigerian private sector. Increased demand contributed to accelerated expansion in output, new orders, and purchasing activity. Additionally, inflationary pressures showed signs of easing, offering further relief to businesses.
The report highlighted growth across multiple sectors, including agriculture, manufacturing, services, and wholesale & retail. However, the increase in wholesale & retail was relatively marginal compared to other sectors.
Stronger Customer Demand Fuels Expansion
New orders also climbed significantly, recording the highest growth in over a year. Businesses reported that customers were more willing to invest in new projects, reflecting improved confidence in the economy.
These positive trends align with recent data from the National Bureau of Statistics, which reported a decline in Nigeria’s inflation rate to 24.48% in January, following a rebasing exercise.
Inflation Trends and Business Costs
Prior to this, Nigeria’s inflation rate had surged to 34.80% in December 2024, up from 34.60% in November. This represented a 0.20% month-on-month increase and a 5.87% rise compared to December 2023. The spike in inflation was largely attributed to increased consumer demand during the festive season.
The PMI report’s authors noted that inflationary pressures remained a challenge, particularly due to rising costs of raw materials and escalating staff expenses—the highest recorded since March 2024.
Employment Growth Slows Despite Business Expansion
While business activity flourished, cost pressures limited the pace of job creation. The report indicated that employment growth was only marginal in February and marked the slowest expansion in the past three months, despite strong business performance.
As Nigeria’s economic landscape continues to evolve, businesses remain optimistic that ongoing reforms and reduced inflationary pressures will sustain this upward trajectory in the months ahead.
