Nigeria’s Private Sector Contracts for First Time in 14 Months

Nigeria’s private sector slipped into contraction in January 2026, as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) fell to 49.7, dropping below the 50.0 threshold that separates growth from contraction. This marks the first decline in fourteen months and signals a challenging start to the year for businesses.

The January reading represents a sharp fall from December’s 53.5 and is the first contractionary figure for the month since the survey began in 2014. The decline reflects weakening business conditions across the economy, according to data compiled by S&P Global and endorsed by the National Bureau of Statistics (NBS).

The contraction was largely driven by stagnating new orders, which ended a prolonged streak of growth. While sectors such as agriculture and manufacturing continued to expand, weakness was particularly pronounced in wholesale and retail trade.

Despite softer demand, employment edged higher for the eighth consecutive month, enabling companies to reduce their backlog of work for the first time in three months. However, rising input costs, particularly for raw materials, and faster-growing staff expenses pushed selling price inflation to a four-month high.

Business sentiment for the year ahead remained positive but weakened compared to previous months. Firms expressed optimism based largely on planned expansions rather than current conditions, highlighting the cautious outlook of the private sector as it faces mounting cost pressures.