The Nigerian economy is on course for a full year contraction.
Data obtained for the Nigerian Sales Managers Index (SMI) shows that the Nigerian economy has entered its fourth consecutive quarter of recession and is thus heading for a full-year contraction in its economy for the first time in decades.
The SMI measures growth across the country and provides the earliest monthly data on the speed and direction of Nigerian economic activity. Its December data shows a continuation of the recession gripping the country as persistent low oil prices, weak currency exchange rates, falling sales and rampant levels of inflation are mounting increasing pressure on businesses, forcing them to cut down profit margins and reduce workforces to continue existing.
The SMI 5 indices which it uses to grade economic activity are business confidence, market growth, sales, prices charged and staffing levels, with business confidence continuing itd 4-yesr decline nd hitting its nadir in the survey’s history.
Market growth and sales output were also graded as falling fast demonstrating the death or reduced abilities of several businesses in the country. The sales growth index showed a slight dip while staffing levels continued to dip drastically. This indicates that several businesses have laid off more and more workers and hence an increase in the unemployment rate should be expected.
To compound matters, the prices charged index continued its rise as the inflation rate continued to increase, putting increasing strain on the ability of Nigerians to access basic needs. According to the report, ‘overall conditions in Nigeria remain challenging with little sign that the economy will exit recession over the coming few months.’