Nigeria’s Business Activity Hits Four-Year High as PMI Rises to 56.4
Nigeria’s private-sector economy recorded its strongest expansion in more than four years in September, with the country reclaiming the position of Africa’s strongest-performing major economy on the Purchasing Managers’ Index (PMI).
BusinessDay’s analysis of S&P Global PMI data showed that Nigeria’s PMI climbed to 56.4 in September, up sharply from 54.3 in August. It was the highest reading since February 2022, when the index stood at 57.3.
A PMI reading above 50 indicates expansion, meaning the September figure points to a significant improvement in private-sector activity.
Nigeria overtook Uganda, which had recorded the strongest PMI among the eight major African economies tracked in August.
The improvement was broad-based. New business expanded for an eighth consecutive month, with the rate of growth accelerating to its strongest level since February 2022.
The increase in new orders subsequently translated into the fastest growth in output in more than four years, with all four sectors covered by the survey recording expansion.
Companies also increased purchasing activity as they prepared for heavier workloads. This resulted in the sharpest accumulation of inventories since the end of 2021.
Employment increased as well, although job creation remained relatively modest, with some companies relying on temporary workers to handle specific projects and rising workloads.
The improvement is significant because it suggests that the Nigerian economy is beginning to experience stronger demand after a prolonged period in which households and businesses were squeezed by inflation, currency volatility and high operating costs.
However, the PMI data also reveals that the recovery is far from cost-free.
Input prices rose sharply during September, driven by higher fuel and transport costs, raw materials, food products and animal feed. Labour costs also increased as businesses adjusted salaries and offered incentives to workers.
Some companies passed the additional costs on to customers, causing output-price inflation to reach a three-month high.
This creates an important contradiction in Nigeria’s recovery story: business activity is accelerating, but the cost of doing business remains elevated.
The Nigerian Economic Summit Group’s own September Business Confidence Monitor paints a similar picture. Its Current Business Performance Index reached a record 117.8 points, up from 112.7 in August.
Trade recorded the strongest performance at 128.5 points, while agriculture rose to 117.7. Manufacturing remained in expansion at 108.4 despite slowing from August, while services stood at 107.7.
Yet NESG said businesses continued to face financing constraints, unreliable electricity, insecurity, infrastructure bottlenecks, high rental costs and raw-material supply problems. Its Cost of Doing Business index remained deeply below the 100-point neutral level at 39.2.
The implication is that Nigeria’s recovery is becoming increasingly visible in economic activity, but policymakers still need to ensure that growth translates into cheaper production, stronger investment and sustainable job creation.
