Nigeria’s Private Sector Benefits from New Orders in September

ABUJA – Private sector activity in Nigeria continued to show growth for the second consecutive month in September, driven mainly by an increase in new orders for chemical and pharmaceutical products, according to a recent business survey conducted by the central bank.

The purchasing managers index (PMI), a key indicator of private-sector performance, rose to 50.5 in September, up from 50.2 in August. A reading above 50 indicates an expansion in activity.

The PMI figures are one of the crucial indicators taken into account by the central bank’s monetary policy committee when determining interest rates.

Recent reforms by President Bola Tinubu, which have included changes to the currency market and the removal of petrol and electricity subsidies, have contributed to rising inflation, thereby diminishing the purchasing power of Nigerians.

The PMI report revealed that 23 out of 36 sub-sectors experienced growth during September, with the cement industry seeing the most significant increase. In contrast, the transportation and warehousing sector reported the largest decline.

Several sectors, including non-metallic mineral products, petroleum, and coal products, remained stable without notable changes.

In an effort to combat inflation, the central bank has increased interest rates five times this year. However, analysts warn that this has led to higher borrowing costs for businesses, potentially hindering overall economic activity.