New data from Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) showed companies reduced staffing levels during the month, ending a stretch of continuous job creation that had lasted since the start of 2025. 

Many businesses said the reductions mainly affected temporary workers as lower demand eased pressure on capacity.

The PMI fell to 46.6 in May from 49.4 in April, the steepest deterioration in business conditions since July 2024. A reading below 50 signals a contraction in activity.

The downturn reveals a strong slowdown across the private sector. New orders declined for a third consecutive month and at their fastest pace since mid-2025 as customers cut spending and tightened household budgets. 

Business activity also weakened further, with firms linking the decline to lower sales and softer demand.

Construction and services companies reported falls in both output and new orders during the month. Manufacturing was the only sector to record growth in production, while declines were recorded elsewhere. Agriculture and retail businesses were among those that reduced staff numbers.

Private sector employment fell after firms reported they had enough capacity to handle current workloads. Backlogs of work also declined for a third straight month, reducing the need for additional hiring.

Christopher Legilisho, economist at Standard Bank, said: “The Stanbic Bank PMI data for May reflects a deterioration of business activity by private sector firms. Inventory purchases slowed, from being expansive, because of weakening sales, cash flow concerns, and rising costs. 

“Consumer resistance to spend, alongside rising costs, contributed to contractions in new orders and output. These declines may stem from the week-long disruption to business activity because of nationwide protests by transportation sector players that constrained movement.”

High costs added to the challenges facing businesses and, ultimately, jobs in Kenya. The survey showed overall input price inflation accelerated to its strongest level since November 2023, driven largely by higher purchase costs, fuel expenses and transportation charges.

Although wage costs continually increase, businesses kept salary growth moderate. Many firms also slowed inventory purchases and held back spending as they sought to preserve cash due to weaker sales and tighter margins.

At the same time, companies passed part of the higher costs on to customers. Selling prices rose at the fastest pace in two and a half years, with all five monitored sectors reporting increases.

The weaker business conditions will likely lead to concerns about employment prospects, particularly as thousands of young Kenyans enter the labour market every month. Consumer-facing businesses, including startups and technology firms that depend on household spending, could also face softer demand if spending remains subdued.

Despite the difficult operating environment, firms were optimistic about the year ahead. Business confidence climbed to its highest level since February 2023, supported by plans to increase advertising, introduce new products and expand digital sales channels.

Legilisho added: “Inflationary pressures have intensified, constraining demand conditions, with input prices, purchase costs and output prices driven up by higher fuel and transportation costs. Still, despite subdued business momentum, firms remain optimistic about future conditions.”

The LCCI said that unlocking these sectors would require decisive implementation of programmes and projects that would scale irrigation and agro-value chains, reduce power and logistics costs for manufacturers.

Other initiatives, according to the chamber, include accelerating the delivery of critical infrastructure through Public Private Participations (PPPs), sustaining oil and gas sector reforms, and aligning education and skills development with private-sector needs.

It said:

“Finally, the chamber emphasises the urgent need to accelerate economic diversification by prioritising manufacturing, reducing reliance on imports, and strengthening domestic productive capacity to build a more resilient, self-sustaining economy.”

These views were expressed by Mr. Leye Kupoluyi, the president of LCCI, when he addressed a press conference that reviewed the state of Nigerian economy last week. Kupoluyi also urged the federal government to resolve constraints in the manufacturing sector.

He said:

“The manufacturing sector’s contribution to tax revenue collections in Nigeria maintained an upward trend in 2025, contributing a total of N1.17 trillion in Value Added Tax (VAT), an increase of 45.61 per cent over the N803.53 billion in 2024.

“The sector’s Company Income Tax (CIT) contribution rose to N881.29 billion, marking a 32.83 per cent increase from N663.46 billion recorded in 2024.

“This strong year-on-year growth reinforces the sector’s expanding role in generating government revenue and in Nigeria’s industrial development. “Following these results, we call on the government to invest more in productive infrastructure and economic policies that drive growth through job creation, lower production costs, and fiscal interventions.”

Kupoluyi said that the chamber remained hopeful that the 2026 revised budget presented a credible framework for Nigeria’s economic consolidation and growth if it is followed up with disciplined execution, capital efficiency, revenue optimisation, and prudent debt management.

He said:

“While the budget provides significant opportunities to advance Nigeria’s productive sectors, safeguard macroeconomic stability, and stimulate job creation, careful monitoring of implementation, debt sustainability, and fiscal prudence will be essential.

The LCCI said that delays in fund releases, bureaucratic bottlenecks, and inefficiencies remained critical challenges historical weaknesses in Nigeria’s budget execution capacity.

It, therefore, said,

“The rollover of N7.71 trillion in unimplemented 2025 capital projects underscores the need for improved fiscal management, effective PPPs and stronger collaboration between the executive and legislature to ensure timely project completion.”

The LCCI urged the government, in light of the current global economic crisis, to strategically. support domestic production in sectors where Nigeria could fill emerging supply gaps, particularly urea and ingots.

It said,

“Given Iran’s position as a major producer in these markets, disruptions could create new demand opportunities that Nigeria can leverage to boost non-oil export earnings and strengthen external reserves. The chamber also highlighted the strategic importance of Dangote Refinery in stabilising the domestic supply of refined petroleum products and cushioning the economy against external energy shocks.”

“The government is, therefore, encouraged to improve crude oil supply to the refinery, while strengthening support for other domestic industries and expanding production capacity in sectors where Nigeria has a comparative advantage. To maximise opportunities in the oil and gas sector, Nigeria must sustainably increase crude oil production, curb theft and leakages, and improve crude supply to domestic refineries to expand local refining and exports,” the chamber said.

“It said that in the short term, improved crude supply to local refineries should be used to stabilize or moderate fuel prices to reduce pressure on households and contain inflation.

“In the medium term, the government should encourage local refineries, including Dangote Refinery, to build strategic reserves of refined products, drawing lessons from countries such as the United States, where companies like ConocoPhillips, Chevron, and Mobil operate storage-supported refining systems,” it said.

Through this collaboration, Afreximbank has committed a US$ 2 billion facility to the “Africa Health Security Investment Plan” to support the health product manufacturing ambition of the continent.

This initiative will focus on the African Pooled Procurement Mechanism (APPM) and the Platform for Harmonized African Health Products Manufacturing (PHAHM).

This initiative is pivotal in addressing Africa’s health investment challenges, promoting economic development, and strengthening health security across the continent.

It also intends to complement GAVI’s innovative financing mechanism, the African Vaccine Manufacturing Accelerator (AVMA) which is set to provide up to USD 2 billion financing to African manufacturers of health and pharmaceutical products over the next ten years.

African pharmaceutical companies face severe impacts of the global health, security and economic challenges, yet they are the drivers of investments and technology advancements that the health sector needs.

Low investor confidence, lack of appropriate infrastructure, trade related barriers, and regulatory challenges are some of the constraints to investment in Africa’s health sector.

While funds might be available, many potential investments do not materialize due to financial and non-financial obstacles.

Coordinated efforts at the continental level are essential to reverse this trend and align with the New Public Health Order.

Closing the investment gap will be crucial to achieving the African Union’s ambition of manufacturing 60% of vaccines needed locally by the year 2040 as well as implementing all other countermeasures necessary to ensure self-reliance especially during crises such as pandemics and outbreaks.

While commenting on the signing, Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said:

“We are pleased to be part of yet another momentous event that will change the course of health security in Africa. This facility will help strengthen the manufacturing of health and pharmaceutical products in Africa through our comprehensive and existing interventions such as Project Preparation funding, Project and Trade Finance as well as Guarantees. Furthermore, we intend to put our full weight behind this facility with equity investments through our subsidiary FEDA – the Fund for Export Development into Africa.”

“Today is a big day for African vaccine manufacturing as well as health products manufacturing in general, as we welcome these major investment announcements that will change the face of health products manufacturing in Africa for years to come. Protecting our future, means investing in our ability to achieve self-reliance on all health countermeasures; vital to accomplish our mission of safeguarding Africa’s health” said Dr. Jean Kaseya, Director General, Africa CDC.

The “Africa Health Security Investment Plan” will allow Afreximbank to support and finance key health projects identified by the Africa CDC.

The joint effort combines institutional and financial resources, financial tools such as equity and debt financing, guarantees, venture capital, capacity building, and risk-sharing to boost and attract more health investments in Africa.

The ‘Africa Health Security Investment Plan’ is built on three key pillars:

1. Technical Assistance and Advisory Services: A single-entry point for health project preparation and implementation, with capacity-building support from the Africa CDC.
2. Investment Project Pipeline: A clear, forward-looking list of health investment projects in Africa, accessible through Afreximbank Project Portal.
3. Regulatory and Normative Support: implementing programs to remove bottlenecks and create a conducive environment for trade and investment, guided by the Technical Steering Committee of Africa CDC- AfCFTA.

The Africa Health Security Investment aims to tackle Africa’s health investment challenges, promote economic growth, and enhance health security across the continent.

Already, the policies are taking tolls on companies with the likes of Airtel and MTN having their forex reserves depreciating.

The President who pleaded with the citizens to understand the reasons for the policy measures his government have taken to combat the serious economic challenges the nation has long faced, said that for several years, he consistently maintained the position that the fuel subsidy had to go.

“This once beneficial measure had outlived its usefulness. The subsidy cost us trillions of Naira yearly. Such a vast sum of money would have been better spent on public transportation, healthcare, schools, housing and even national security. Instead, it was being funnelled into the deep pockets and lavish bank accounts of a select group of individuals….

“Also, the multiple exchange rate system that had been established became nothing but a highway of currency speculation. It diverted money that should have been used to create jobs, build factories and businesses for millions of people. Our national wealth was doled on favourable terms to a handful of people who have been made filthy rich simply by moving money from one hand to another. This too was extremely unfair.

“It also compounded the threat that the illicit and mass accumulation of money posed to the future of our democratic system and its economy.

The Tinubu acknowledged that the economy is going through a tough patch and the citizens are being hurt by it. “The cost of fuel has gone up. Food and other prices have followed it. Households and businesses struggle. Things seem anxious and uncertain. I understand the hardship you face. I wish there were other ways. But there is not. If there were, I would have taken that route as I came here to help not hurt the people and nation that I love”.

He rolled out plans to cushion the effects:

Manufacturing sector to receive NGN75 billion

To strengthen the manufacturing sector, increase its capacity to expand and create good paying jobs, the President said his administration is “going to spend NGN75 billion between July 2023 and March 2024.

Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity”.

Each of the 75 manufacturing enterprises, he said, will be able to access NGN1billion credit at 9% per annum with maximum of 60 months repayment for long term loans and 12 months for working capital.

MSMEs to receive NGN125 billion

“Our administration recognises the importance of micro, small and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125 billion.

Out of the sum, the Federal Government will spend N50 billion on Conditional Grant to 1 million nano businesses between now and March 2024.

“Our target is to give NGN50,000 each to 1,300 nano business owners in each of the 774 local governments across the country”, Tinubu said.

“Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system. In like manner, we will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between NGN500,000 to NGN1million at 9% interest per annum and a repayment period of 36 months.

Release of 200,000 Metric Tonnes of grains

“To further ensure that prices of food items remain affordable, we have had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain.

“In the short and immediate terms, we will ensure staple foods are available and affordable. To this end, I have ordered release of 200,000 Metric Tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices. We are also providing 225,000 metric tonnes of fertilizer, seedlings and other inputs to farmers who are committed to our food security agenda.

Agricultural investments worth NGN 200 billion

“Our plan to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course. To be specific, N200 billion out of the NGN500 billion approved by the National Assembly will be disbursed as follows:

• Our administration will invest NGN50 billion each to cultivate 150,000 hectares of rice and maize.
• NGN50 billion each will also be earmarked to cultivate 100,000 hectares of wheat and cassava.

This expansive agricultural programme will be implemented targeting small-holder farmers and leveraging large-scale private sector players in the agric-business with strong performance record.

In this regard, he said that the expertise of Development Finance Institutions, commercial banks and microfinance banks will be tapped into to develop a viable and an appropriate transaction structure for all stakeholders.

Tinubu’s Transportation Investment plan – NGN 100 billion

“Part of our programme is to roll out buses across the states and local governments for mass transit at a much more affordable rate. We have made provision to invest NGN100 billion between now and March 2024 to acquire 3000 units of 20-seater CNG-fuelled buses.

“These buses will be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period.

New minimum wage is coming

“In the same vein, we are also working in collaboration with the Labour unions to introduce a new national minimum wage for workers. I want to tell our workers this: your salary review is coming”.

He said that once they agree on the new minimum wage and general upward review, the government will make budget provision for it for immediate implementation.

He applauded many private employers in the Organised Private Sector who have already implemented general salary review for employees.

Sophos, a global leader in innovating and delivering cybersecurity as a service, has announced a new sectoral survey report, “The State of Ransomware in Manufacturing and Production 2023,” which found that in more than two-thirds (68%) of ransomware attacks against this sector, the adversaries successfully encrypted data.

This is the highest reported encryption rate for the sector over the past three years and is in line with a broader cross-sector trend of attackers more frequently succeeding in encrypting data.

However, in contrast to other sectors, the percentage of manufacturing organizations that used backups to recover data has increased, with 73% of the manufacturing organizations surveyed using backups this year versus 58% in the previous year. Despite this increase, the sector still has one of the lowest data recovery rates.

“Using backups as a primary recovery mechanism is encouraging, since the use of backups promotes a faster recovery. While ransom payments cannot always be avoided, we know from our survey response data that paying a ransom doubles the costs of recovery,” said John Shier, field CTO, Sophos. “With 77% of manufacturing organizations reporting lost revenue after a ransomware attack, this added cost burden should be avoided, and priority placed on earlier detection and response.”

In addition, despite the growing use of backups, manufacturing and production reported longer recovery times this year. In 2022, 67% of manufacturing organizations recovered within a week, while 33% recovered in more than week. This past year, only 55% of manufacturing organizations surveyed recovered within a week.  

“Longer recovery times in manufacturing are a concerning development. As we’ve seen in Sophos’ Active Adversary reports, based on incident response cases, the manufacturing sector is consistently at the top of organizations needing assistance recovering from attacks. This extended recovery is negatively impacting IT teams, where 69% report that addressing security incidents is consuming too much time and 66% are unable to work on other projects.”

Sophos provides a look at a large-scale ransomware attack against a manufacturing company in its newly released three-part “Think You Know Ransomware?” documentary series. In episode 2, Sophos interviews the chief information security officer of Norsk Hydro, a major aluminum production company, to learn about the aftermath and investigation of the attack against the company.

Sophos experts recommend the following best practices for organizations in manufacturing and across all other sectors:

• Strengthen defensive shields with:
  • Security tools that defend against the most common attack vectors, including endpoint protection with strong anti-exploit capabilities to prevent exploitation of vulnerabilities, and Zero Trust Network Access (ZTNA) to thwart the abuse of compromised credentials
  • Adaptive technologies that respond automatically to attacks, disrupting adversaries and buying defenders time to respond
  • 24/7 threat detection, investigation and response, whether delivered in-house or by a specialist Managed Detection and Response (MDR) provider
• Optimize attack preparation, including making regular backups, practicing recovering data from backups and maintaining an up-to-date incident response plan
• Maintain good security hygiene, including timely patching and regularly reviewing security tool configurations

To learn more about the State of Ransomware in Manufacturing and Production, download the full report from Sophos.com.

The State of Ransomware 2023 survey polled 3,000 IT/cybersecurity leaders in organizations with between 100 and 5,000 employees, including 363 organizations in manufacturing and production, across 14 countries in the Americas, EMEA and Asia Pacific.

The Act aims to address the longstanding issues in the Nigerian power sector, which have hindered economic growth and development.

The Manufacturers Association of Nigeria (MAN) recognizes the potential of the Electricity Act 2023 to be a game-changer for the manufacturing sector.

The Director General of MAN, Mr Segun Ajayi-Kadir, highlights the challenges faced by the power sector in the past, including poor policy enforcement, over-regulation, instability of gas supply, and transmission network bottlenecks.

These problems have resulted in erratic electricity supply, frequent power outages, and collapses of the national grid, all of which have hindered the growth of the economy.

The inadequate electricity supply in Nigeria has been a major obstacle for manufacturers, leading to significant economic losses.

Manufacturers have been compelled to spend a substantial amount on alternative energy sources, which has negatively impacted their profitability.

However, the newly signed Electricity Act 2023 is expected to address these constraints and reduce the cost of alternative energy.

The Act introduces cost-reflective electricity tariffs, which will promote healthy price competition between states and private investors. By addressing the challenges in the power sector, the Act is expected to encourage the inflow of manufacturing Foreign Direct Investment (FDI) and increase the sector’s contribution to the economy.

It is anticipated that the Act will boost Internally Generated Revenue (IGR), stimulate investment in renewable energy, improve infrastructure, ensure more stable power supply, and alleviate the tax burden on manufacturers.

Furthermore, empowering private manufacturing companies to generate their own electricity will encourage investment in backward integration activities, enhancing energy security within the sector.

To maximize the benefits of the Electricity Act 2023, the MAN DG suggests that the government consider their recommendations.

These recommendations include strengthening the security infrastructure to create a conducive environment for investors, providing legal, financial, and technical support to state governments in establishing electricity market laws, and promoting partnerships between state governments and existing agencies and operators in the power sector.

The effective implementation of the Act is also emphasized, calling for the appointment of a committed and experienced Minister of Power.

The excitement was hinged on the fact that Nigeria presumably can start local production of phones, even though ITF claimed that the phones were locally produced by the Model Skills Training Centre of the Industrial Training Fund; an agency under the Ministry of Industry Trade and Investment.

“Phones were produced using locally sourced components, by the Electrical/Electronics Technology Department of the Industrial Training Fund’s (ITF) Model Skills Training Centre,” Joseph Ari, ITF Director General said.

The following year on August 1st, ITF DG reassured Nigerians in Jos that the agency was almost finalizing plans to process requirements to enable Nigeria to begin mass production of Android phones in the country. This also includes Intellectual Property Rights, patent rights, legal framework, etc.

“We needed to also work with other regulatory agencies in terms of drawing the legal framework and other things and we are now at the concluding end to find the legal framework for intellectual property rights.

So, from that June last year till now, we have done a lot to ensure that we roll out the mass production of Android mobile phones and even a private company in Lagos. Afrione an Indian company has also approached us to partner with us in the area of capacity building and we have already signed a memorandum of understanding in that regard. So the rolling plan is on the course,” he said.

Perceived Bottlenecks

As of the time of filing this report, there is no record of mass production of ITF mobile phones or Android phones.

Industry analysts have argued that ITF mobile phones were only assembled and not locally manufactured, saying that there was no record of any made-in-Nigeria phone.

However, local production of smartphones or phones will require access to a circuit board, microphone, display, speaker, sim card holder, buzzer, vibrator, monitor battery, antenna, etc.

TechEconomy gathered that Africa’s largest economy lacks the capacity currently to completely manufacture phones until its able to fabricate the chips and components that make up high-tech technology devices.

“The phone that was showcased by the Minister of Industry, Trade, and Investment, Otunba Niyi Adebayo, is just an example of other phones that have been assembled in Nigeria,” National Coordinator for the Alliance for Affordable Internet, Olusola Teniola said in August.

“The component that makes up the phone and the screen were packed by other technology companies outside Nigeria. Nigeria can only claim to have assembled the phone. There is no record of any indigenous phone that was built bottom-up in Nigeria.”

Teniola said that he was aware of some companies assembling phones in Nigeria just like AfriOne clarifying that the firms only assemble but don’t manufacture phones.

“What they do at AfriOne is the assembling of parts like others, but they do not manufacture. Afrione is one of those who have been able to produce an assembled featured phone.”

Phone Market

Nigeria, according to the World Bank, has the largest mobile market in Sub-Saharan Africa, due to its strong mobile broadband infrastructure and improved international connectivity. One of the most important sectors in the country is telecommunications.

It is estimated that the average device owner changes devices every 6 to 18 months, while approximately 63 million devices are sold in Nigeria each year, according to the Nigerian Communications Commission,

On the other hand, Counterpoint Research’s Global Monthly Handset Sales Tracker, annual smartphone sales in Nigeria will increase by 81% year on year in 2021.

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The indigenous automobile manufacturer made this statement on Monday, through Cornel Osigwe, Head, Corporate Communications and Affairs. However, revealed that modalities are currently being marshaled out to have brand ambassadors.

The statement reads: “Innoson Vehicles aka IVM doesn’t have any Brand Ambassador and has never had one before. Please don’t fall to scammers pretending to be IVM Brand Ambassador(s).

“We are working on modalities to have one soon and it will be publicly unveiled to the general public. Please be advised.”

The business mogul suggested that, among other things, the manufacturing sector’s share of the Gross Domestic Product (GDP) should more than double to 20%, up from the present 9%, during the next ten years to encourage industrialization in the nation.

Dangote delivered a speech at the 2nd Adekola Odutola Lecture in Lagos, which was held in honor of the Manufacturers Association of Nigeria’s (MAN) 50th Annual General Meeting.

He stated: “Nigeria needs to, henceforth, intensify efforts at promoting industrialization with a specific focus on the attainment of the following targets in the next 10 years:

“15% manufacturing sector growth, 20% manufacturing contribution to GDP, 15% growth in export of manufactured products, 10% increase in the share of manufacturing to total export merchandise, the stronger inter-industry linkage between SMEs and large corporations, improved manufacturing contribution to government tax revenue and 20% increase in manufacturing employment.”

Dangote remarked that by connecting industrial activity with the primary sector, domestic and international trade, and service activities, industrialization enhances a country’s ability to compete globally in the creation of processed and manufactured commodities.

His words: “To achieve industrialization goals, it is necessary for a nation to formulate plans and policies that will enhance and sustain industrial development. Sustainable industrial development involves the establishment of a conducive environment to encourage investment and ensure efficient usage of resources to increase the productivity and growth of the nation.

“The creation of a pathway to steady and sustained industrial growth entails the deployment of industrialization-centric strategies and policies; promotion of the National Manufacturing Philosophy; securing the buy-in of government for successful implementation of the agenda; promotion of smart manufacturing; the establishment of a robust framework aimed at improving the business environment, the extension of comprehensive and integrated support to priority sectors with strong linkages and growth potentials as espoused in the NDP 2021-2025 with particular emphasis on improved value addition and export of manufactured products.

It also entails the development of strong partnerships with the private sector within and outside the country.”