Nigeria’s Economic Activity Remains Robust 11 Months of Expansion Confirmed by PMI Data

Nigeria’s economy appears to be entering a sustained phase of momentum, with the composite Purchasing Managers’ Index (PMI) reading for October 2025 climbing to 55.4, up from 54.0 in September. According to the Central Bank of Nigeria’s (CBN) latest report, this marks the eleventh consecutive month of expansion, a rare streak in recent years and a sign of broad-based business confidence across industry, services, and agriculture. (Businessday NG)

What the PMI Numbers Show

• The industry sector PMI registered 54.2, with nine out of seventeen sub-sectors reporting growth, signaling a revival of industrial production.
• The services sector, often a bellwether of consumer demand and business sentiment, also recorded expansion, suggesting continued activity in trade, logistics, telecoms, finance and other key service areas.
• The agriculture component remained strong, reflecting resilience in farming, agribusiness and food-value chains even as input costs have been challenging.

Out of the 36 sub-sectors tracked by the PMI survey, 25 recorded expansion in October, reinforcing the narrative of multi-sector strength in Nigeria’s economic recovery.

Why This Matters

1. Economic Diversification: The fact that agriculture, services, and industrial segments are all expanding suggests Nigeria’s economy is not relying solely on oil or extractive sectors. This is a positive indicator that diversification efforts are bearing fruit.
2. Business Confidence: Sustained PMI readings above 50 indicate healthy optimism among business leaders. Continued expansion may encourage firms to re-invest, scale operations, and commit to long-term projects.
3. Investment Signal: For both domestic and foreign investors, sustained PMI strength suggests opportunities for capital deployment across sectors, particularly in manufacturing, logistics, and agribusiness.
4. Policy Validation: The CBN and the federal government are likely to view the PMI data as a validation of their reform agenda foreign-exchange reforms, fiscal discipline and infrastructure initiatives and may use this momentum to deepen reform.

Challenges and Risks That Remain

Even with the strong PMI, some macro and structural challenges still deserve close attention:

• Cost Pressures: Rising input costs, energy expenses, and FX-driven price pressures can erode profit margins for manufacturing and agri firms.
• Liquidity Constraints: Access to affordable financing remains uneven, particularly for small and medium-sized enterprises (SMEs) in non-oil sectors.
• Infrastructure Deficits: Inadequate power supply, road logistics, and port inefficiencies continue to impose a high cost on production and distribution.
• Inflation and Currency Risk: While business activity is improving, inflation remains a threat; a sustained return of volatility could derail consumer demand and raise working-capital costs.
• Security Risk: In several parts of Nigeria, insecurity in rural and industrial zones threatens supply chains and logistics, potentially disrupting production.

Stakeholder Implications

For Policymakers
The 11-month expansion streak offers a policy window: the government can now double down on reform, infrastructure, and access to capital, leveraging business optimism to accelerate growth. It may also give credibility to plans for increased public-private investment and further FX liberalisation.

For Business Leaders
Companies should evaluate how to scale operations, invest in capacity, and re-tool supply chains to benefit from stronger demand. Those in manufacturing and agro-processing are particularly well-placed to capitalise on the momentum.

For Investors
The consistent PMI expansion could trigger increased investment in Nigeria’s real economy. Equity investors may look at industrial and agribusiness plays; fixed income investors may see opportunity in corporate debt funding growth-oriented firms.

For Workers and Consumers
Expanded business activity can translate into job creation, higher incomes and improved services. However, the benefits will only materialize if firms convert expectations into real-scale investment rather than remain cautious.

What to Watch Next

• PMI trends in November and December: Will the expansion continue, slow, or reverse?
• Breakdown of PMI growth: Which sub-sectors are strongest, and which lag?
• Credit growth: Is the banking sector financing the expanding business pipeline?
• Capital expenditure announcements: Are firms planning major investments in plant, equipment, workforce?
• Inflation, FX stability, and policy continuity: Will macro headwinds undermine business confidence?

Nigeria’s 11th consecutive month of PMI-based expansion is a powerful signal that economic recovery is gaining depth and breadth. The sustained momentum across industry, services, and agriculture underscores not only business resilience but also the potential viability of reform-driven growth.

Yet, optimism must be backed by action: for the recovery to truly stick, Nigeria must tackle credit access, logistics, energy costs, and sectoral bottlenecks. If it can do that, the current expansion may mark the beginning of a more sustained and inclusive economic chapter.