Nigerian Private Sector Sees Growth in April as Cash Crisis Eases

Nigeria’s private sector has experienced a welcome boost with growth recorded in April, following the easing of the country’s cash crisis.

The Purchasing Managers’ Index (PMI) report by Stanbic IBTC Bank showed that the private sector returned to growth, with the index moving back above the 50.0 no-change mark for the first time in three months, pointing to a solid overall improvement in business conditions.

Key findings of the report showed that there was a renewed rise in new orders, output, and purchasing, with firms reporting expansions in new business and output amid improved access to funds. However, employment fell slightly, and companies remained cautious with regards to hiring.

The survey noted a more normal business environment as customer numbers improved in line with greater access to cash.

While input costs increased at a sharper rate, firms increased their selling prices at the softest pace for three years as they attempted to attract more customers. Rebounds in activity were seen across agriculture, manufacturing, services, and wholesale and retail sectors.

The report, however, showed that business sentiment remained subdued despite a slight pick-up from March, with optimism among the lowest seen since the survey began in January 2014. The cautiousness regarding employment is expected to continue, and firms may take some time to fully adjust to the changes.

The renewed growth in the private sector is a positive indication for the Nigerian economy after a difficult period of cash shortages. The improved access to funds has helped firms to increase output and attract more customers, which will undoubtedly have a positive impact on the overall health of the economy.

However, it is important to note that caution remains necessary as the economy continues to recover from the cash crisis, and it may take some time for the private sector to return to pre-crisis levels. Nevertheless, this is an encouraging sign that Nigeria’s private sector is moving in the right direction.