NESG urges FG to anchor economic growth on productivity, not inflation
A new report has shown that companies, faced with rising input costs for materials and transportation, have passed these higher expenses on to customers.

This is according to Stanbic IBTC Bank’s Purchasing Managers’ Index (PMI) report for the month of August, at 54.2; above the 50.0 no-change mark for the ninth month running, signalling a sustained improvement in the health of the Nigerian private sector.

Moreover, the latest reading was up from 54.0 in July, pointing to a solid strengthening of business conditions and one that was the most pronounced since April.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

Sharper increases in output and new orders were recorded, although rates of expansion in purchasing activity and employment eased significantly.

Meanwhile, business confidence softened, but firms remained optimistic that output would increase over the coming year.

The rise in the headline index primarily reflected sharper expansions in output and new orders, with rates of growth hitting four and 19-month highs, respectively. Businesses reported stronger customer demand and a greater willingness among clients to commit to new projects.

Output increased across three of the four broad sectors covered by the survey; the exception being manufacturing.

The report further noted that a slower increase in purchasing activity was also registered in August.

Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, noted that the opening of new branches and marketing plans support firms’ optimism that output would increase over the coming year.

MEANWHILE, the Nigeria Economic Summit Group (NESG) has called on the Federal Government to anchor its economic growth objectives on productivity and not inflation.

The NESG, which made the call in a report on the outcome of the Gross Domestic Product (GDP) rebasing exercise recently concluded by the National Bureau of Statistics (NBS), said: “The rebasing of Nigeria’s GDP is more than a recalibration of economic statistics; it is a diagnostic scan revealing deep structural imbalances and fiscal vulnerabilities.

It stressed the need to anchor economic growth on productivity, saying: “With real GDP having grown only 4.4 per cent since 2019, the priority is to stimulate value-added growth in sectors with high employment multipliers. This means targeted industrial policy, sector-specific competitiveness programmes, and technology adoption in agriculture and manufacturing.”

The economic think-tank group also called for a state of emergency in the industrial sector, while also urging the government to address energy reliability, logistics bottlenecks, and input costs, among others.

NESG further recommended that the Federal Government should “leverage agriculture’s resilience by moving beyond subsistence, scale mechanisation, expand irrigation, improve rural transport, and build agro-processing hubs to raise productivity, value capture, and export potential, among others.