Nigeria: Agriculture, Manufacturing Lead in Output Expansion As Price Inflation Ticks Higher - Report

What the report says

Stanbic IBTC Bank’s August Purchasing Managers’ Index pointed to a stronger expansion in Nigeria’s private sector, with the headline reading rising to 54.3 from 52.5 in July. The report, published through This Day and distributed by AllAfrica, said agriculture and manufacturing led the month’s output growth, while activity increased across all four broad sectors covered by the survey.

The PMI indicated that business activity has now expanded for 21 straight months, and that August saw the fastest pace of growth in more than two years. New orders also rose for a seventh consecutive month, supported by new product launches and firmer customer demand. Stanbic IBTC said firms remained optimistic about future output and were considering hiring more workers, entering new markets and expanding operations.

At the same time, the survey showed that cost pressures remained elevated. Input prices continued to climb in August, with fuel-related transport costs and raw material prices cited as key drivers. Companies passed some of those increases on to customers, leading to a further rise in selling prices, with agriculture recording the sharpest increase in output prices.

The report matters because it suggests Nigeria’s private sector is still growing, even as inflationary pressures continue to affect business costs and consumer prices. In a comment quoted by the report, Stanbic IBTC’s head of equity research for West Africa said food prices and other cost indicators remained on an upward trend.