Nigeria’s Private Sector Rebounds as PMI Rises to 53.2 Amid Easing Inflation — Stanbic IBTC
By Rashidat Olushola Okunlade
Nigeria’s private sector recorded a return to growth in February 2026, recovering from a subdued start to the year as renewed customer demand boosted business activity, according to the latest Purchasing Managers’ Index (PMI) report by Stanbic IBTC Bank.
The headline PMI rose to 53.2 in February from 49.7 in January, signaling a solid improvement in business conditions. Readings above 50 indicate expansion, while those below reflect contraction.
Growth was driven largely by a rebound in new orders, which encouraged firms to scale up production, increase staffing levels, and expand inventories. Business activity accelerated significantly, supported by improved customer demand and competitive pricing strategies. Notably, the wholesale and retail sector, which had contracted in January, returned to growth, ensuring expansion across all four sectors tracked in the survey.
Commenting on the development, Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, attributed the positive momentum to stronger consumer demand and increased product offerings. Output and new orders both posted marked increases, reflecting renewed economic activity across key sectors.
The report also highlighted a significant easing of inflationary pressures, aided by the appreciation of the naira. Input costs and output prices rose at their slowest pace in over six years, providing relief to businesses and consumers alike. The naira has maintained relative stability, trading below ₦1,400 to the US dollar since late January, supported by improved foreign exchange inflows, stronger external accounts, and interventions by the Central Bank of Nigeria.
Despite continued job creation now sustained for nine consecutive months businesses faced mounting backlogs, which grew at the fastest rate since May 2020. Companies cited delayed client payments, workforce shortages, material constraints, and persistent power supply challenges as key factors contributing to operational delays.
To meet rising demand, firms increased purchasing activity and inventory levels, while supplier delivery times improved due to prompt payments and better traffic conditions.
On the macroeconomic outlook, the Nigerian economy is projected to grow by 3.86 percent year-on-year in the first quarter of 2026, with full-year GDP growth forecast at 4.1 percent. This outlook is underpinned by government investments in infrastructure, livestock development, and efforts to ease trade barriers and attract investment into key sectors such as oil and gas and manufacturing.
Additionally, structural gains from the Dangote Refinery are expected to create positive ripple effects across the economy. Lower inflation, exchange rate stability, and the prospect of reduced interest rates are also anticipated to support consumer spending and business investment throughout the year.
While business confidence improved in February, overall sentiment remained cautious, with firms focusing on expansion strategies and advertising to sustain growth over the next 12 months.
