Nigeria still in solid footing in April

The Nigerian private sector started the second quarter on a solid footing, with respondents noted a sharp improvement in business conditions during April. Headline PMI was recorded at 58.1 in April, easing from 58.8 in March. In fact, the latest expansion was the second-strongest since the survey began, following the all-time high registered in March. Record output growth and marked improvements in new orders and employment all contributed to the latest expansion. On the price front, input cost inflation sharpened whilst output charge inflation eased, reflecting comments of a budget squeeze from some businesses.

“The Stanbic IBTC Bank headline PMI continued to show that the Nigerian economy is still on a strong recovery path despite easing to 58.1 in April from a record 58.8 in March. In fact the data shows that private sector output grew at a strong pace despite the fact that new orders grew at a slightly slower pace. On the other hand, new export orders jumped markedly in April probably due to a combination of both oil and non-oil exports. Output prices rose at quite a sluggish pace suggesting that the recent trend of lower headline inflation readings should continue, perhaps paving the way for a first policy rate cut by the central bank in years. In any case, the central bank has begun an effective easing in monetary conditions with Treasury bill rates now offering yields of around 13% from about 18% in November 2017. The more supportive commodity price environment coupled with a functional foreign exchange regime and easier monetary conditions should result in a better than expected recovery in the Nigerian economy.” Ayomide Mejabi, Economist at Stanbic Bank