Nigeria’s private sector continued its upward trajectory into the second quarter of 2025, buoyed by solid customer demand, easing inflationary pressures, and broad-based expansion across key industries.
According to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI®) report, business activity remained robust in April, reinforcing positive momentum despite lingering macroeconomic uncertainties.
The headline PMI stood at 54.2 in April, marginally down from 54.3 in March, yet marking the fifth consecutive month above the 50.0 no-change threshold that separates growth from contraction.
Analysts say the latest figures confirm the resilience of Nigeria’s private sector despite foreign exchange instability and elevated energy costs
April’s PMI report showed the strongest output growth since January 2024, with all four key sectors—agriculture, manufacturing, services, and wholesale/retail—posting expansions.
The services sector led the growth pack, reflecting a rebound in consumer-facing industries.
“This latest improvement in business activity was primarily due to improved customer demand amid softening inflationary pressures, helping to support higher new orders,” said Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank.
In response to increased workloads, companies ramped up hiring for the fifth straight month, with employment growth reaching an eight-month high, although still modest by historical standards. Purchasing activity also surged, rising at the fastest rate since February 2022 as firms stocked up in anticipation of continued demand.
Despite the additional hiring and inventory buildup, backlogs of work increased again in April, suggesting that supply chains and operational capacity are still under strain.
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“In line with this improvement, the employment level increased for the fifth consecutive month,” Oni noted. “Companies are optimistic, but many are still catching up with order volumes.”
While inflationary pressures ticked up slightly in April compared to March, they remained significantly lower than 2024 levels, when steep currency depreciation and subsidy removals drove sharp price hikes.
However, cost pressures were still present due to rising energy costs, higher raw material prices, and continued naira weakness.
“Inflationary pressures continue to soften relative to 2024 as the major price-driving shocks have moderated,” Oni explained. “Nonetheless, April saw a slight inflation uptick due to the weakening local currency and higher energy prices.”
Manufacturing firms bore the brunt of these pressures, experiencing the highest input cost increases across all sectors.
While some of these costs were passed on to consumers, overall output price inflation remained among the lowest seen in the past two years, providing relief for end-users.
“Private sector firms remain broadly optimistic, but the sentiment has moderated slightly due to continued uncertainty around the naira and global headwinds,” said Dr. Tunde Ajayi, senior economist at the Nigerian Economic Summit Group (NESG).
“The fundamentals are improving, but structural reforms must continue to avoid a confidence reversal.”
However, analysts emphasize that continued policy support—particularly in exchange rate management, energy pricing, and infrastructure—will be critical to maintain momentum.
“With the right macroeconomic adjustments and improved FX liquidity, Nigeria’s private sector is well-positioned to drive inclusive growth through the rest of 2025,” said Oni.