Key Takeaways
- Nigeria’s private sector maintained strong growth momentum at the end of 2025, with the PMI at 53.5 in December.
- Growth was fueled by increasing customer demand, higher output led by agriculture, inventory build-up, and expanded employment despite moderate inflation rises.
- Business confidence hit a six-month high, supported by planned expansions and an economic growth forecast of 3.8% in 2025 and 4.1% in 2026.
Nigeria’s private sector sustained prosperous growth during the close of 2025, underscoring resilience in Africa’s largest economy. The headline Purchasing Managers’ Index (PMI), compiled by Stanbic IBTC Bank Nigeria and S&P Global, recorded a reading of 53.5 in December, slightly down from November’s 53.6. This marked the thirteenth consecutive month of improved business conditions, signalling continuity in expansion across major sectors.
Rising Demand Drives Sectoral Prosperity
December’s expansion was primarily driven by stronger customer demand, which propelled the fourteenth straight monthly increase in new orders. Firms correspondingly ramped up production, with agriculture notably leading growth among the four surveyed sectors. Businesses further increased purchasing activity and inventory holdings to accommodate this elevated demand.
Employment levels rose for the sixth month running, though the pace of hiring tapered to its slowest since June 2025. Inflationary pressures in December edged higher but remained near recent lows. Elevated raw material costs led to a significant jump in input prices, while companies also faced increases in staff costs reflecting additional work hours. These factors prompted firms—especially in manufacturing—to raise selling prices.
Business confidence improved significantly, reaching a six-month peak. Nearly 59% of respondents forecasted growth, buoyed by plans for investments in expansion projects and new branches. This optimism reflects a constructive outlook for sustained prosperity in the private sector.
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Analyst Scenarios and Economic Context
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, noted that while input prices rose sharply from November’s near five-year lows, overall inflation remained below the 2025 average. He attributed the inflation increase to heightened festive season spending.
Oni projected Nigeria’s economy to grow by 3.8% in 2025 and accelerate to 4.1% in 2026. He highlighted expectations that both the manufacturing and services sectors will experience stronger growth compared to 2024, propelled by the private sector’s ongoing momentum.
This sustained prosperity within Nigeria’s private sector reinforces investor confidence and signals a positive economic trajectory despite moderate inflationary challenges.
Prosperity: Market Outlook
The Purchasing Managers’ Index holding above the 50-point threshold for thirteen consecutive months affirms Nigeria’s private sector expansion through December 2025. The combination of rising sales, increased output particularly in agriculture, and a cautious yet growing labor market demonstrates a balanced environment for business growth.
While inflationary pressures have risen slightly due to raw material costs and staff compensation, these remain contained relative to earlier in the year. Firms’ proactive price adjustments indicate a responsive market adapting to cost fluctuations without undermining growth.
Looking ahead, business confidence and planned investment underscore a favorable start for 2026, with anticipated economic growth rates of 3.8% in 2025 and 4.1% in 2026 reinforcing the outlook for continued prosperity across key Nigerian sectors.
