Nigeria’s Economic Activity Expands for the 11th Consecutive Month, Signaling Broad-Based Recovery

Nigeria’s economic recovery appears to be gaining durable footing, with the latest composite Purchasing Managers’ Index (PMI) rising to 55.4 in October 2025 signifying the eleventh consecutive month of growth, according to a report from the Central Bank of Nigeria (CBN). The sustained expansion spans across manufacturing, services, and agriculture, suggesting a broad-based rebound in business activity.

The PMI data, cited by the Vanguard, highlights that the industry, service, and agricultural sectors all contributed to this momentum. (Vanguard News)

Sectoral Dynamics

1. Manufacturing Rising
   The manufacturing PMI component stood at 54.2, with nine out of 17 sub sectors indicating growth. This points to increasing production across a range of industries from consumer goods to intermediate inputs. Firms report stronger new orders and improving capacity utilization, signaling a revival of industrial activity after months of liquidity and cost pressures.
2. Services Rebound
   The services sector, a vital part of Nigeria’s economic engine, continues to drive demand. Key sub-sectors such as trade, transport, telecoms, and professional services report improved business conditions. The rebound suggests consumer confidence is recovering, and businesses are resuming investment in services-oriented opportunities.
3. Agriculture Maintains Traction
   Agriculture also remains a key contributor to the PMI strength. According to the survey, several farming and agro-processing sub-sectors are expanding, as input availability improves and farmers capitalize on favorable harvests. This suggests that agribusiness is stabilizing and possibly scaling up post supply chain disruptions.

What’s Behind the Sustained Expansion

• Reform Momentum: The government’s reform agenda spanning FX liberalization, subsidy rationalization, and fiscal discipline has helped restore investor and business confidence.
• Stronger Credit Flows: Some banks report improved credit disbursements to productive sectors, including SMEs, manufacturers, and agribusinesses, supporting expansion.
• Improved Infrastructure: While challenges remain, there’s a gradual easing of supply-side bottlenecks, especially in transport and power, making production more viable.
• Domestic Demand Recovery: With inflation stabilizing and some wage adjustments made, consumer demand is showing signs of reemergence particularly in urban centres.

Risks to the Recovery

• Cost Pressures: Production costs energy, FX-derived inputs, and transport remain high. If these costs re-escalate, firms may struggle to maintain margins.
• Inflation Risk: Though inflation has moderated, many analysts warn of potential rebounds if global commodity prices surge or supply shocks hit.
• Liquidity Constraints: Not all businesses are accessing credit equally; smaller firms in less connected regions may struggle.
• Policy Reversal: Any slip in reform momentum, especially on FX or fiscal fronts, could undermine business confidence and disrupt the recovery.
• Security: Insecurity in agricultural and industrial zones remains a risk for supply chains, particularly for rural producers.

Implications for Stakeholders

• For Policymakers: The sustained PMI upswing gives the government a mandate to deepen reforms, invest in infrastructure, and encourage private-sector credit.
• For Businesses: The broad-based expansion offers a window for scaling operations, investing in capacity, and targeting growth segments.
• For Investors: This may be an opportune moment to reassess investments in Nigeria particularly in manufacturing, logistics, and agribusiness.
• For Citizens: Economic growth can translate into job opportunities, improved services, and potentially better incomes especially if reforms support inclusive economic participation.

What to Watch Forward

• The November and December PMI readings: Will expansion continue into the year-end?
• Credit growth trends: Are banks increasing lending to productive sectors in line with demand?
• Inflation trajectory: Will inflation remain stable, or will it spike again?
• Policy developments: Will the government and the CBN continue to support growth via reforms?
• Capital investments: Are businesses reinvesting profits into capacity expansion, or remaining cautious?

Nigeria’s 11 straight months of PMI-based growth is more than just a statistical streak it may reflect a genuine shift in economic momentum. With positive signals from industry, services, and agriculture, and reform efforts in motion, Nigeria may be entering a more resilient growth phase.

However, sustaining this trajectory will require careful policy management, infrastructure support, and equitable credit allocation. For now, the PMI data offers a promising backdrop, but the work of turning confidence into long-term prosperity continues.