Nigeria’s economic activity is expanding, but the latest Central Bank of Nigeria (CBN) surveys suggest that the improvement is yet to translate into stronger household confidence or easier operating conditions for businesses.

The composite Purchasing Managers’ Index (PMI) rose to 53 points in September, its fourth consecutive month of expansion. Industry, services and agriculture recorded growth.

Yet, in the same month, household sentiment deteriorated sharply, inflation concerns intensified and businesses continued to rank taxation, insecurity and high interest rates among their biggest constraints.

The PMI showed that economic activity was not merely being sustained but broadening. Output, new orders, employment and raw material inventories all expanded, while supplier delivery times improved. Twenty-three subsectors expanded, helping to keep the composite index above the 50-point threshold that separates expansion from contraction.

Industry also strengthened, with its PMI rising from 50.6 points in August to 52 points in September, while services remained in expansion at 53.2 points. Agriculture recorded 53.1 points, extending its expansion streak to 26 consecutive months.

But the stronger activity indicators are running alongside a much weaker picture of how Nigerians perceive their economic circumstances.

The CBN’s Inflation Expectations Survey showed that the share of households perceiving inflation as high jumped from 67.2 per cent in August to 77.2 per cent in September. The increase was more pronounced among rural households, where 79.1 per cent reported perceiving inflation as high, while households earning below N70,000 recorded the highest perception at 80 per cent.

The pressure was also reflected in household behaviour.

Overall consumer sentiment fell to -18.7 points in September from -9.9 points in August, while sentiment on economic conditions, family finances and family income remained negative.

The survey found that households were prioritising essentials, with food, transport, education, electricity and water among their main expenditure areas.

That pressure is changing not only what households buy but also what they are willing to commit money to.

The CBN reported negative purchase intentions for houses, motor vehicles, investments, household appliances and rent.

Sentiment on house purchases stood at -68.2 points, while car and motor vehicle acquisition recorded -67.3 points and investments -50.7 points.

The bank said the buying conditions index for major purchases remained below the 50-point threshold across all three survey horizons.

The figures suggest that the expansion recorded in economic activity is taking place alongside a defensive shift in household spending. Nigerians may be participating in an economy that is recording stronger measured activity while remaining cautious about making commitments that require substantial income.

Businesses are facing a similar tension.

The Business Expectations Survey placed multiple taxation at the top of firms’ concerns at 67.1 index points, followed by insecurity at 66.2 points and high interest rates at 64.3 points. High bank charges, competition and unclear economic laws were also among the leading constraints.

The Business Confidence Index remained positive at 13.4 points, supported mainly by increased demand, economic diversification and access to finance. Industry confidence rose from 17.1 points in August to 19.4 points in September, although services and agriculture recorded declines while remaining positive.

The CBN therefore captured an economy where activity and expectations are moving in different directions.

Firms remain hopeful about future conditions, with business confidence projected to rise to 23.6 points in December 2026 and 36.1 points by March 2027. Respondents also expect the naira to gain modestly against the dollar and borrowing costs to decline somewhat over the next six months, although they expect interest rates to remain high throughout the review periods.
The challenge is that optimism about what may come next is not the same as relief from present pressures.

The CBN surveys show that distinction clearly. Economic activity has entered a fourth month of expansion, but 77.2 per cent of households now perceive inflation as high, major purchases remain unattractive and businesses continue to identify taxation, insecurity and borrowing costs as major obstacles.

For the recovery to become more visible in everyday economic life, the expansion in output and orders will have to increasingly translate into stronger household purchasing power and better business conditions.

For now, the data point to an economy that is growing, but with households still holding back and firms navigating substantial costs and risks.