The Nigerian private sector has staged a robust recovery, shaking off a sluggish start to 2026.
According to the latest Stanbic IBTC Purchasing Managers’ Index (PMI), business conditions improved significantly in February as the headline index climbed to 53.2 points, up from the 49.7 contractionary mark recorded in January.
The recovery was largely fueled by a resurgence in new orders and improved product affordability, marking a return to the growth trajectory that has characterized the economy since late 2024, barring the January blip.
Currency Stability Eases Six-Year Inflationary Pressure
A pivotal factor in February’s performance was the relative stability and appreciation of the Naira.
Analysts noted that the local currency has consistently traded below ₦1,400/$ since late January, providing much-needed relief to businesses grappling with high input costs.
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Key Inflation Metrics:
- Purchase Costs: Rose at the slowest pace in over six years.
- Output Prices: Selling price inflation eased to its lowest level since January 2020.
- Staff Costs: Continued to rise as firms provided “cost-of-living” adjustments to employees.
“Local currency appreciation helped to support softer input and output prices in February… Strengthening external accounts and higher offshore FX flows continue to support higher FX supplies,” noted Muyiwa Oni, head of Equity Research West Africa at Stanbic IBTC Bank.
Sectoral Performance and Employment
The growth was broad-based, with all four monitored sectors, Agriculture, Manufacturing, Services, and Wholesale & Retail, posting expansions.
Notably, the Wholesale & Retail sector, which struggled in January, returned to growth as consumer demand rebounded.
Labour Market & Operations:
- Job Creation: Employment increased for the ninth consecutive month, hitting its fastest pace since October.
- Backlogs: Despite hiring, work backlogs grew at the fastest rate since May 2020, attributed to power supply issues and delayed client payments.
- Inventory: Firms aggressively expanded purchasing activity and stock holdings to keep pace with rising order volumes.
The February PMI data suggests that the Nigerian economy is finding its footing following the shock therapy of recent reforms.
With the economy on track to grow by 3.86% y/y in Q1 2026, the combination of exchange rate stabilization and the forward-linkage impacts of the Dangote Refinery are creating a more predictable environment for private investment.
For the average Nigerian, the most significant takeaway is the cooling of output price inflation. If the trend of competitive pricing continues, it could signal a meaningful improvement in the quality of life as real purchasing power begins to stabilize after two years of intense inflationary pressure.
