Nigeria’s economy is showing signs of recovery as it heads into 2026, driven by stronger business momentum, easing inflation, and a firmer naira. Recent data from the Central Bank’s Purchasing Managers’ Index (PMI) indicates that the private sector may be entering its most stable period in over a year, raising optimism for Africa’s largest economy. Companies are regaining confidence after years of currency volatility, rising costs, and supply chain disruptions.
The October PMI report revealed a composite score of 55.4 points, marking the eleventh consecutive month above the 50-point expansion threshold. Gains were broad-based across agriculture, services, and industry, with output, new orders, and employment all contributing to the positive reading. Analysts note that this sustained expansion signals that government reforms to stabilize inflation, boost FX liquidity, and restore investor confidence are beginning to take effect.
Agriculture led the recovery, with its PMI climbing to 57.5 in October, reflecting improved harvests, stronger new orders, and favorable growing conditions. While forestry, fish farming, and support services moderated slightly, all five agricultural sub-sectors remained in expansion territory. Experts suggest that this could ease food inflation pressures and support consumer demand, providing a critical backbone for Nigeria’s broader economic recovery.
The services sector, which makes up more than half of Nigeria’s GDP, also showed steady improvement with a PMI of 55.6, expanding for the ninth consecutive month. Key industries including telecommunications, finance, trade, and transport benefited from lower inflation and improved FX conditions, helping restore consumer purchasing power. Meanwhile, the industrial sector recorded significant gains, with production, new orders, and employment rising as supply chains stabilized and access to raw materials improved.
Despite these positive trends, risks remain. Insecurity in farming regions, power supply issues, high logistics costs, and challenges in the oil sector could dampen growth. Global uncertainties, such as oil price volatility and tighter international financial conditions, also pose challenges. Still, analysts are cautiously optimistic that private sector conditions will remain expansionary, and if current trends continue, Nigeria could achieve GDP growth between 4.0% and 4.5% by the end of 2025.
source: The Sun