Nigeria’s private sector has maintained expansion in April 2026, but rising fuel costs driven by global tensions pushed firms to increase selling prices to the highest level in 16 months, according to the latest Stanbic IBTC Bank Purchasing Managers’ Index (PMI) report.
The report showed that companies passed elevated input costs to customers, with output price inflation accelerating to its strongest level since December 2024.
Headline PMI rose to 52.4 in April from 51.9 in March, marking the third consecutive month above the 50-point threshold that signals expansion in business conditions.
What the report says
The report read, “Output price inflation at 16-month high amid rising fuel costs.”
The report noted that improved customer numbers and stronger market demand supported continued growth in new orders and overall business activity during the month.
However, inflationary pressures—largely linked to fuel costs—slowed the pace of expansion. Firms reported that higher prices constrained both new orders and output growth, even as activity increased across most sectors.
- It added, “The pass through of increased input costs to customers resulted in a further sharp rise in output prices, with the rate of inflation quickening to the fastest since December 2024.”
Sectoral performance remained uneven, with activity rising in three out of four sectors tracked, while the services sector recorded a decline.
- “Lingering inflationary pressures limited the pace of expansion,” said Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, adding that businesses still recorded stronger demand conditions overall.
Fuel costs drive sharp rise in prices
A key theme across the report was the impact of rising fuel costs, linked to the ongoing Middle East crisis, which fed into broader inflation across the private sector.
Purchase prices increased rapidly, maintaining levels close to March’s 15-month high, while firms also faced higher staff costs as some raised wages to cushion workers against rising transport expenses.
These cost pressures forced companies to raise selling prices aggressively.
- “Companies increased their selling prices in April to the highest level since December 2024 in response to rising fuel and raw material costs,” Oni stated.
The report added that the pass-through of input cost increases to customers resulted in a “further sharp rise in output prices,” showing the intensity of inflationary pressures across the economy.
Employment, inventories and outlook
Despite cost pressures, firms continued to adjust operations in response to demand conditions.
- Employment rose in April, though job creation remained marginal and was the weakest in three months.
- Some firms cited staff shortages, payment delays from customers, and challenges in sourcing raw materials as factors contributing to a build-up in backlogs of work, which increased for the third consecutive month.
- Purchasing activity expanded for the 17th straight month, with firms also increasing inventory levels at the fastest pace in five months to meet anticipated demand.
Supplier delivery times improved slightly, supported by prompt payments from firms seeking to secure materials, although the improvement was the weakest recorded so far in 2026.
Looking ahead, business sentiment strengthened, with about half of the surveyed firms expecting output to increase over the next 12 months.
Oni noted that companies are planning expansion through new branches, stock accumulation, and entry into new markets, reinforcing expectations of stronger economic growth.
Stanbic IBTC projects Nigeria’s economy to grow by 4.22% year-on-year in 2026, up from 3.87% in 2025, driven largely by the non-oil sector.
However, the report cautioned that while growth momentum is improving, persistent cost pressures—particularly from fuel—remain a key constraint on the pace of expansion across the private sector.
What you should know
While the Stanbic IBTC Bank Purchasing Managers’ Index report shows economic expansion, the PMI report by the Central Bank of Nigeria (CBN) noted that Nigeria’s economic activity slipped into contraction in April 2026 as the PMI fell to 49.4, marking the first decline after 16 consecutive months of expansion.
The report also linked the moderation in business conditions to external pressures, including heightened geopolitical tensions, particularly in the Middle East, which may have disrupted supply chains and business confidence.
