Admin I Monday, Jan.04.26
LAGOS — Nigeria’s private sector maintained its expansionary momentum through the end of 2025, buoyed by resilient consumer demand and a sharp uptick in business optimism, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI) data.
The headline PMI registered 53.5 in December, a marginal dip from 53.6 in November but firmly above the 50.0 threshold that separates growth from contraction.
The reading marks the thirteenth consecutive month of improving business conditions, capping a year of steady recovery for Africa’s largest economy.
The expansion was underpinned by a “marked” increase in new orders, which in turn drove higher output across all four monitored sectors—agriculture, manufacturing, services, and retail.
Agriculture led the pack in production growth. This sustained demand encouraged firms to ramp up purchasing activity and expand inventories, though job creation remained more tempered, growing at its slowest pace since mid-year.
”The continued expansion in business activity in December reflects higher customer demand,” said Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank. “This encouraged companies to expand their purchasing activity and inventory holdings.”
Despite the positive momentum, logistical headwinds persisted. Companies reported a slight rise in work backlogs, citing material shortages and intermittent power supply issues.
While suppliers’ delivery times continued to improve, the rate of improvement was the slowest in six months, hampered by poor road infrastructure.
Inflationary pressures showed signs of a modest revival during the festive season.
Overall input prices rose sharply compared to November’s five-year low, driven by higher raw material costs and increased staff pay for additional holiday hours. Consequently, selling prices rose at their fastest clip in several months, with the manufacturing sector leading the price hikes.
Stanbic IBTC estimates that headline inflation reached 32.34% year-on-year in December, a figure partly inflated by a “low-base effect” following the country’s consumer price index (CPI) rebasing.
However, the uptick in costs did little to dampen corporate spirits. Business confidence surged to a six-month high, with nearly 59% of survey respondents predicting growth in 2026.
This optimism is tied to aggressive expansion plans, including the opening of new branches and a push into export markets.
Looking ahead, analysts are increasingly bullish on Nigeria’s trajectory.
The government’s focus on infrastructure, livestock development, and trade facilitation, alongside the “forward-linkage impact” of the Dangote refinery, is expected to broaden the drivers of GDP.
”We now see the Nigerian economy growing by 3.8% in 2025 and 4.1% in 2026,” Mr. Oni noted, adding that expected interest rate cuts and a stabilizing exchange rate should further support private consumption and investment in the coming year.
