Nigeria Economic Update, Issue 6

According to the Central Bank of Nigeria’s Purchasing Managers’ Index (PMI), business activities in Nigeria maintained an expansionary path, with the composite PMI standing at 55.7 points in January 2026. While the current index represents a decrease from the 57.6 points recorded in December 2025, the current record marks the fourteenth consecutive month of business expansion, as the index remained above the 50-point threshold. Key sectors of the economy experienced growth, leading to sustained increases in overall output. Specifically, the industrial sector stood at 56.0 points, the services sector at 54.5 points, and the agriculture sector at 54.2 points. Although input and output price indices reduced slightly during the month, input price indices remained higher than output prices across the sectors measured, indicating inflationary and cost pressures. Overall, this signals sustained growth early into 2026, but increasing inflationary pressures point to the need for policies that ease production bottlenecks, improve energy and transport infrastructure, enhance supply chain efficiency, and reduce cost pressures to sustain expansion. Therefore, government policies should focus on easing the constraints that raise production costs, particularly in power supply and access to affordable credit for manufacturers and agribusinesses. There is also a need for continued efforts to stabilise inflation and prevent cost pressures from eroding business confidence and slowing the pace of expansion.

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