Nigeria’s private sector recorded its strongest expansion in more than four years in September, helping the country reclaim the top position among major African economies tracked by the Purchasing Managers’ Index (PMI).
The Stanbic IBTC Bank Nigeria PMI rose to 56.4 in September from 54.3 in August, marking the strongest improvement in private-sector business conditions since February 2022. A reading above 50 indicates an expansion in activity.
The latest performance was driven largely by stronger customer demand, a rise in new orders and increased output across the sectors covered by the survey.
New orders drive stronger activity
New business increased for the eighth consecutive month in September, with the pace of growth reaching its fastest level since February 2022.
Businesses also reported stronger output as they responded to higher workloads and improving demand. All four sectors covered by the survey recorded increases in activity and new business during the month.
Companies also increased purchasing and rebuilt inventories to meet current and expected demand. Inventory accumulation reached its strongest level since late 2021.
The stronger demand also encouraged businesses to increase hiring for the 16th consecutive month, although much of the additional employment was temporary and linked to specific tasks.
Nigeria outpaces regional peers
The September reading places Nigeria among the strongest-performing major African economies in the latest PMI comparisons.
The improvement is particularly notable against South Africa, where private-sector activity contracted in September at its fastest pace since December. The downturn was linked to weaker new orders, supply disruptions and higher fuel-related costs.
Nigeria’s stronger showing therefore reflects a relatively broad improvement in domestic business activity, although companies continue to face significant cost pressures.
Rising costs remain a concern
The recovery in demand has come alongside higher operating costs.
Businesses reported increased prices for fuel, food, raw materials and labour during September. Purchase-price inflation reached a three-month high, while higher fuel costs continued to push up transportation expenses.
This creates a challenge for companies as stronger sales must translate into sustainable profits despite rising input expenses.
Growth outlook improves
Stanbic IBTC’s Head of Equity Research for West Africa, Muyiwa Oni, said the strong end to the third quarter was consistent with estimated GDP growth of about 4.56 percent year-on-year in Q3 2026.
He also raised the full-year growth outlook to approximately 4.4 percent, from 3.87 percent recorded in 2025.
Manufacturing is expected to receive a significant boost, while ICT, trade, real estate, and finance and insurance are projected to remain important drivers of services-sector growth.
The latest PMI therefore points to stronger momentum entering the final quarter of the year. However, sustaining the recovery will depend on how businesses manage rising costs and whether stronger demand can translate into more permanent jobs, investment and broader economic gains.
SEO Title: Nigeria Reclaims Africa’s Top PMI Spot as Activity Hits Four-Year High
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