Nigeria’s private sector returned to growth in February, as new orders increased and inflationary pressures eased, according to the latest Purchasing Managers’ Index report released by Stanbic IBTC Bank.
The headline PMI rose to 53.2 in February from 49.7 in January, moving above the 50.0 threshold that signals improvement in business conditions. The February reading indicates a solid monthly recovery in the health of the private sector after a brief dip at the start of the year.
The report showed that new orders returned to growth, supported by improved customer demand and better product affordability. Output also regained momentum, rising at the fastest pace in four months. All four monitored sectors recorded higher activity, with wholesale and retail rebounding after a decline in January.
Employment increased for the ninth consecutive month, with staffing levels rising at the fastest pace since October last year. However, despite continued hiring, backlogs of work grew at the sharpest rate since May 2020. Companies linked the rise in outstanding business to delayed customer payments, staff shortages, material supply challenges and power outages.
Firms also expanded purchasing activity and increased inventories in response to stronger demand. Supplier delivery times shortened for the eighth straight month, helped by prompt payments and improved traffic conditions.
Inflationary pressures showed signs of easing during the month. Purchase cost inflation slowed to its weakest level in just over six years, partly due to an appreciation of the naira. While some businesses reported higher prices for animal feed and raw materials, overall input cost increases softened.
Output price inflation also slowed sharply, easing to its lowest level since January 2020. Some firms offered discounts to attract customers, although charges still rose overall due to the pass-through of input costs.
Commenting on the report, the Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said the rebound in February was driven by stronger customer demand and competitive pricing.
He noted that output and new orders both increased markedly during the month, with wholesale and retail returning to expansion.
Oni added that currency appreciation supported softer input and output prices, as the naira traded below 1,400 to the US dollar consistently from late January. He said strengthening external accounts, higher foreign exchange inflows and improved remittances had helped boost FX supply.
He said, “After the dip seen in January, the Nigerian private sector returned to growth, with the headline PMI settling higher at 53.2 points in February from 49.7 in January. This was in line with higher customer demand, which drove higher new product offerings at competitive pricing. Accordingly, output (55.8 vs January: 50.2) regained momentum in February, while new orders (55.5 vs January: 49.9) also increased markedly in the month. Notably, the wholesale and retail sector, which had dipped in January, returned to growth, thereby ensuring that all four monitored sectors in the survey increased in February. Elsewhere, local currency appreciation helped to support softer input and output prices in February, as the naira has been trading below 1400 against the USD consistently since 29 January. Strengthening external accounts, higher offshore FX flows, and improvement in remittances continue to support higher FX supplies, with the CBN also stepping in by buying USD in the FX market to moderate the pace of local currency appreciation.”
Oni added that “the Nigerian economy is on track to grow 3.86 per cent year on year in the first quarter of 2026, and we still see real GDP growth at 4.1 per cent year on year in 2026. The government has been visible in infrastructure, livestock development, easing trade constraints, and attracting investments in oil and gas and manufacturing. Aside from that, the Dangote refinery is expected to continue to have a forward-linkage impact on other sectors of the economy.
“Additionally, likely lower interest rates in line with lower inflation and exchange rate stabilisation should support private consumption and business investments in 2026. Because of these factors, we see more sectors contributing to the real GDP growth rate in 2026 compared to 2025, likely translating to an improvement in the quality of life of the citizens compared to the last two years when the citizens witnessed the full negative impact of the government’s flagship reforms.”
Looking ahead, business confidence improved slightly in February, although sentiment remained relatively subdued. More than 53 per cent of respondents expect output to rise over the next twelve months, supported by advertising efforts and expansion plans.