Africa's Beating Economic Pulse

Nigeria's private sector showed resilience in H1 2025, driven by improved purchasing activity, stable exchange rates, and easing inflation. According to economic analyst ABIODUN JIMOH, despite lingering challenges such as high fuel costs and insecurity, business confidence remained upbeat, supported by government reforms and a favourable monetary environment.

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Nigeria's private sector remained in expansion territory for the seventh consecutive month in June 2025, though the pace of growth has softened. The latest Stanbic IBTC Bank Purchasing Managers' Index (PMI), compiled by S&P Global, declined to 51.6 from 52.7 in May, signaling a slower but still positive business environment. Any figure above 50 indicates growth, while below 50 signals contraction.

The index, which aggregates data from around 400 firms across key sectors including agriculture, manufacturing, wholesale and retail, construction, and services, provides a snapshot of the economy's health from the perspective of private businesses. In June, while growth persisted, it did so at its weakest pace since the start of 2025, raising questions about the sustainability of the current momentum.

Output and new business orders continued to rise, but the rate of expansion lost steam. Companies noted that demand remained positive but lacked the energy witnessed earlier in the year. Manufacturing and services remained the primary drivers of growth, while agriculture and retail faced headwinds, partly due to weaker consumer purchasing power and logistical challenges.

Adding to the concerns were rising backlogs of work, reported at the highest level since February 2023. These backlogs suggest that while demand exists, operational delays and inefficiencies are beginning to creep in. Respondents cited delayed customer payments and insufficient staffing as major contributors to the backlog buildup.