Nigeria’s business confidence rises on sustained growth in 2025 –Report

The sustained growth in the Nigerian private sector in 2025 has triggered an increase in business confidence, the Stanbic IBTC Purchasing Managers’ Index (PMI) has revealed.

The report revealed that new orders and business activities continued to rise in the first month of 2025. Also, there was a large improvement in business confidence while firms expanded employment, purchasing and inventories. Although input costs and output prices continued to rise rapidly, respective rates of inflation were much slower than seen in December.

According to the 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 posted 52.0 in January, down from 52.7 in December but still above the 50.0 no-change mark and therefore signaling a second successive monthly improvement in the health of the Nigerian private sector.

Business activity rose solidly in January, after having returned to growth in December. That said, the rate of expansion eased from the previous month. Activity increased across three of the four monitored sectors, the exception being wholesale and retail.

Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said: “Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024. We note an increase in both output (53.7 vs December 2024: 54.8) and new orders (52.6 vs December 2024: 53.2) although slightly weaker than that seen at the end of 2024, on account of improving customer demand and more willingness to commit to new projects.

“Given the rising new orders, companies took on additional workers in January – representing the second month running in which this has been the case.

“Elsewhere, input prices increased at a slower pace while the pace of increase in output prices is the slowest since July 2024.

“Headline inflation averaged 33.18 per cent year-on-year in 2024 from an average of 24.52 per cent year-on-year in 2023, mostly driven by significant FX depreciation; renewed petrol price increases in line with full petrol price liberalization; structurally low food supplies exacerbated by high extreme weather conditions; and increased food demand, especially during the festive season.

“We expect a moderation in the inflation rate in 2025 although the pace of the moderation is only likely to be faster in third quarter 2025. Notably, we expect headline inflation to average 30.5 per cent year-on-year in 2025 and end the year at 27.1 per cent year-on-year.

“In 2025, we project the non-oil sector to grow by 3.2 per cent year-on-year from an estimated 3.0 per cent year-on-year in 2024. Growth is likely to pick up across manufacturing and trade, while ICT and finance and insurance should continue to play a big role in economic performance.

“However, agriculture will likely still lag its long-term average amid lingering internal security challenges, high input costs, and extreme weather conditions. Within the manufacturing sector, cement, food and chemicals and pharmaceutical products are key sub-sectors that have been exceeding the manufacturing sector’s growth since fourth quarter 2022.”