The Nigerian private sector witnessed a contraction in growth in March 2026, as higher fuel costs triggered by the war in Iran, instigated by the United States and Israel, led to a steep intensification of inflationary pressures.
According to the Stanbic IBTC Purchasing Managers’ Index (PMI) for the month, it stood at 51.9 points compared with 53.2 points recorded in February 2026.
In the period under review, output growth was only modest, but underlying demand reportedly remained resilient, leading to a further sharp rise in new orders. In turn, firms continued to expand their employment and purchasing activity.
The PMI numbers in the first quarter of this year have been consistent with an estimated 3.99 per cent y/y GDP growth for the quarter, after also accounting for the crude oil sector’s performance.
The Nigerian economy is now growing by 4.22 per cent y/y in 2026, from 3.87 per cent y/y in 2025, with the oil sector growth slowing to 3.01 per cent y/y from 8.50 per cent y/y in the preceding year. The non-oil sector’s growth is expected at 4.24 per cent y/y in 2026, from 3.71 per cent y/y in 2025, likely driven primarily by services, which we see growing by 5.64 per cent y/y in 2026 versus 4.14 per cent y/y in 2025.
“While higher fuel costs and power supply issues contributed to a slowdown in the growth of Nigeria’s private sector activity, underlying demand remains strong. This is reflected in an increase in customer demand and the associated impact of new product launches, both of which supported an improvement in new orders.
“Businesses also remained optimistic about increases in future output amid their plans to invest in business expansions and boost promotional efforts. Nonetheless, input prices rose markedly at the sharpest pace since January 2025, with all four monitored sectors seeing sharper rates of inflation,” the Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, commented.
