Nigeria: Private-sector business conditions deteriorate steeply in March
The Purchasing Managers’ Index (PMI)—produced by Stanbic IBTC Bank and S&P Global—dropped to 42.3 in March, down from February’s 44.7. As a result, the index moved further below the 50.0 no-change mark, signaling the starkest deterioration in private-sector operating conditions since May 2020. March’s result marked the second consecutive month of deteriorating conditions, following a 31-month streak of improvements.
March’s downturn reflected the impact of the cash crisis on the economy. Clients were unable to make purchases amid cash shortages, leading to sharper drops in output and new business. These developments, coupled with struggles to pay wages, prompted firms to let go of staff in March.
Turning to prices, input costs rose at the softest pace in nearly three years, but inflation was still marked. Similarly, output charges increased at the slowest rate since April 2020. Lastly, firms’ sentiment was the second-most downbeat in the series’ history, dampened by the ongoing cash crisis.