December 14, 2020

Nigeria Economic Update (Issue 44)

The manufacturing and non-manufacturing Purchasing Managers’ Index (PMI) for the month of October showed a slowing contraction relative to previous months, making it the 7th consecutive month both indices have been below the 50-index point benchmark.1 Manufacturing PMI increased from 46.9 index points to 49.4 index points while non-manufacturing increased from 41.9 index points to 46.8 index points, but still below the 50-index point benchmark. However, 6 out of 14 subsectors in the manufacturing sector recorded an expansion relative to the previous month. In the non-manufacturing sector, only 3 out of the 7 sub sectors recorded growth relative to the previous month. Production is expected to improve significantly as the economy rebounds and the festive season approaches, thus both manufacturing and non-manufacturing PMI are expected to advance towards the 50-index point benchmark. However, the increase in PMI, as a result of increased demand, is likely to be associated with rising inflation. As such, the Central Bank of Nigeria (CBN) should increase efforts towards addressing the rapid increase in the price of commodities.

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Africa Economic Update (Issue 2)

Business activities in Africa slightly improved in February 2017 albeit at a slow rate. Sales Managers Index (SMI) for Africa an assessment of business condition in Pan-African Economy increased by 0.4 index points from 52.2 points in January 2017 to 52.6 points in February 2017. Sub-Saharan African countries experienced better business activities than North Africa in the review period. The two largest economies in the region, Nigeria (48.5 index points) and South Africa (49.2 Index points) registered contraction in the review period as Nigeria remained in recession while high unemployment remained a problem in South Africa. The growth in SMI recorded in the review period is driven by improvement in business confidence and sales price which outweighed the fall in other components market growth, sales output and staffing level.