The Nigerian private sector remained in growth territory at the start of
the second quarter of the year as customer numbers and market demand
continued to strengthen. That said, the impacts of higher fuel costs as
a result of the war in the Middle East were felt again, pushing up
prices and reportedly limiting expansions in new orders and business
activity. The headline figure derived from the survey is the Stanbic
IBTC Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal
an improvement in business conditions on the previous month, while
readings below 50.0 show a deterioration. The headline PMI ticked up to
52.4 in April from 51.9 in March, above the 50.0 no-change mark for the
third month running and signalling a solid strengthening in the health
of the private sector. The rate of improvement was slightly greater than
that seen in the previous survey period.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank
commented: “The health of Nigeria’s private sector improved in April
– remaining above the 50-points growth threshold for the third
consecutive month – as new orders increased in line with higher
customer numbers and rising demand even as price pressures remain
prevalent. Accordingly, the headline PMI increased to 52.4 points in
April from 51.9 points seen in March. Despite the improvement in new
orders, we understand that lingering inflationary pressures limited the
pace of expansion. Notably, companies increased their selling prices in
April to the highest level since December 2024 in response to rising
fuel and raw material costs. Staff costs also increased modestly as some
companies increased their staff pay so as to help them with increasing
transportation fares. Business expectations also improved in April
compared to March as businesses plan to expand their operations through
the opening of new branches, stock building, and entry into new markets.
“The improved start of the second quarter of the year by Nigerian
businesses continues to support our view of improved growth expectations
in 2026 relative to 2025. Hence, we still maintain our expectation that
the Nigerian economy is likely to grow by 4.22% y/y in 2026, from 3.87%
y/y in 2025. We estimate the non-oil sector’s growth at 4.24% y/y in
2026, from 3.71% y/y in 2025, likely driven primarily by services, which
we see growing by 5.64% y/y in 2026 (vs 2025: 4.14% y/y). The
government’s continuous investment attraction across oil & gas, solid
minerals, electricity, agriculture and general manufacturing should
continue to support sentiment on production activity. However, the oil
sector’s growth is likely to moderate to 3.01% y/y (vs 2025: 8.50%
y/y), as we now expect crude oil production (including condensates) to
average 1.70m bpd, from 1.64m bpd in 2025.”
Improving demand conditions meant that new orders continued to rise,
albeit with the rate of growth softening amid inflationary pressures.
Business activity also increased, and at a solid pace that was slightly
faster than that seen in March. Here too, however, companies mentioned
that rising prices had limited the pace of growth. Activity rose in
three of the four monitored sectors, the exception being services.
Anecdotal evidence suggested that prices were often driven higher by
increased fuel costs due to the war in the Middle East. Purchase prices
increased rapidly, with the rate of inflation little-changed from
March’s 15-month high. Meanwhile, staff costs rose modestly as companies
in some cases increased pay to help workers deal with higher
transportation fares. The pass through of increased input costs to
customers resulted in a further sharp rise in output prices, with the
rate of inflation quickening to the fastest since December 2024.
Companies took on extra staff in April in response to rising workloads,
but the rate of job creation was only marginal and the softest in three
months. Some firms reported that staff shortages had been behind the
latest accumulation of backlogs of work, while others cited customer
payment delays and issues securing raw materials. Outstanding business
increased for the third consecutive month in April.
Further efforts were made to secure materials, with purchasing activity
increasing for the seventeenth month running in April. Stocks of
purchases also rose amid improving customer demand, and at a marked pace
that was the sharpest in five months. Where companies placed orders for
materials, they often made sure to pay on time in order to secure
deliveries. As a result, supplier lead times shortened again, albeit to
the least extent in 2026 so far.
Business sentiment ticked higher in April, with companies often citing
plans to expand operations. Half of all respondents predicted that their
output will increase over the next 12 months.
