Nigeria: Economic conditions stabilize in April
May 5, 2016
In April, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from March’s 49.6 to 50.0. As a result of April’s improvement, the indicator sits at the 50-threshold that separates contraction from expansion in business conditions.
April’s increase reflected a stable new orders reading and a better print for stocks. According to an economist at Stanbic IBTC Bank, “after two consecutive months of deterioration, business conditions stabilized somewhat. That being said, the output PMI fell for the third straight month, suggesting that businesses continue to struggle within a weak macroeconomic context. Furthermore, the sharp fall in international orders of Nigerian goods and services is concerning. It is plausible that the uncertainty around the foreign exchange mechanism has influenced foreign businesses to stay out of the Nigerian market for the time being. Clearly, a coherent economic plan and its delivery is key to improving business sentiment both domestically and internationally. In the meantime, price pressures persist as selling prices continue to increase at a fast pace due to petrol supply challenges and the weak exchange rate on the parallel market.”