February PMI Report: Nigeria Achieves Record Productivity Growth

In February 2025, Nigeria experienced its highest productivity growth in 14 months with a PMI rise from 52.0 to 53.7. This increase reflects solid improvements in business conditions across all monitored sectors, bolstered by stable exchange rates and moderating inflation. Real GDP growth for Q4 2024 reached 3.84%, indicating positive momentum for the non-oil sector going into 2025.

In February 2025, Nigeria’s economy recorded its most significant productivity growth since January 2024, according to the Stanbic IBTC Bank’s Purchasing Manager’s Index (PMI) report. The headline figure increased from 52.0 in January to 53.7, indicating a solid improvement in business conditions for the private sector over three consecutive months. This growth is attributed to heightened demand and easing inflationary pressures.

The report indicates that advancements in output, new orders, and purchasing activity were prominent, correlating with increased customer demand. Although the wholesale and retail sector showed only fractional growth, all monitored sectors, including agriculture, manufacturing, services, and wholesale & retail, experienced activity increases. New orders rose at their most significant pace in over a year, driven by clients’ willingness to engage in new projects.

Mr. Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, emphasized that the ongoing improvements in Nigeria’s private sector are supported by a stable exchange rate and decreasing fuel prices, which helped mitigate inflationary pressures. This enhanced consumer demand has been a vital factor in the continuing rise in new orders and output, with the output index reaching 56.9 in February.

Furthermore, Nigeria’s real GDP growth for Q4 2024 rose to 3.84% year-on-year, showing a notable increase from the 3.46% reported in Q3 2024. Oni noted that the contributions to GDP growth were primarily from the services sector, which accounted for 79%, followed by agriculture at 11.9% and industry at 9%. Expectations are optimistic for the non-oil sector in 2025, driven by favorable foreign exchange conditions and potential reductions in borrowing costs.

The analysis of February 2025’s PMI highlights Nigeria’s robust economic performance, characterized by a significant rise in productivity and an increase in private sector activity. Driven by stable exchange rates and reduced inflationary pressures, this upward trend is likely to continue into 2025, further strengthening the non-oil sector, which plays a critical role in the economy’s overall growth.

Original Source: www.thisdaylive.com