Nigeria Experiences Strongest Business Growth Since 2024 as Economic Reforms Take Effect

Nigeria’s business sector reported its fastest growth since 2024 as reflected in the PMI, which rose to 53.7 in February. Despite modest employment growth due to cost pressures, sectors including agriculture and manufacturing showed significant expansion. Additionally, the inflation rate decreased to 24.48% following recent economic reforms.

Nigeria’s business activities experienced their most rapid growth since 2024, reflecting the positive impact of recent economic reforms. The latest Purchasing Managers’ Index (PMI) released by Stanbic IBTC Bank indicates the headline index rose to 53.7 in February, a significant increase from January’s 52.0. This indicates a robust monthly enhancement in business conditions, the strongest since January 2024.

Improved growth momentum was observed in various sectors, including agriculture, manufacturing, services, and wholesale & retail, although the latter only showed a minimal increase. The PMI report highlighted a notable escalation in new orders, suggesting that clients are increasingly willing to undertake new projects, further contributing to positive business sentiment.

Data from the National Bureau of Statistics revealed a decline in Nigeria’s inflation rate, which fell to 24.48 percent in January following a rebasing exercise after previously peaking at 34.80 percent in December 2024. This decrease indicates potential easing of inflationary pressures, which previously were aggravated by festive season demand.

Despite these positive developments, the PMI report noted continued cost pressures due to elevated prices for raw materials and an increase in staff-related expenses, the most substantial since March 2024. Consequently, job creation in February only experienced marginal growth, marked as the slowest in three months, amidst continued expansions in the economy.

In conclusion, Nigeria’s business environment is showing signs of considerable recovery, as evident from the latest PMI data reflecting the fastest growth since 2024. Despite challenges such as rising costs impacting employment rates, growth is bolstered by increased demand and a decreasing inflation rate. The effectiveness of economic reforms is becoming increasingly evident, providing a foundation for sustained improvement in business conditions.

Original Source: businessday.ng