Economic activities in Nigeria expanded for the second consecutive month in February 2025, with the Purchasing Managers’ Index (PMI) rising to 51.4 index points, according to the latest report released by the Central Bank of Nigeria (CBN) on Friday.
This marks a continued recovery in economic activity, signaling growth in key sectors, including industry, services, and agriculture, which recorded 50.5, 51.1, and 53.1 index points, respectively.
The expansion, driven by increased production and investment, suggests that businesses are gradually adapting to the current economic environment despite ongoing structural challenges.
Register for Tekedia Mini-MBA edition 17 (June 9 – Sept 6, 2025) today for early bird discounts. Do annual for access to Blucera.com.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register to become a better CEO or Director with Tekedia CEO & Director Program.
A further breakdown of the 36 sub-sectors reviewed across industry, services, and agriculture showed that 21 sub-sectors recorded growth in economic activities, with the cement sector leading the expansion. On the other hand, 13 sub-sectors experienced a decline, with nonmetallic mineral products recording the highest contraction.
Meanwhile, two sub-sectors—Plastics & Rubber Products and Accommodation & Food Services—remained unchanged during the period. This uneven growth highlights how certain industries are benefiting from improved economic conditions, while others are still struggling due to high operational costs, foreign exchange volatility, and weak consumer demand.
The CBN’s Business Expectation Survey Report, also released on Friday, showed that businesses remained optimistic about the macroeconomic outlook in February 2025. The optimism is largely driven by expectations of a stronger Naira, with many businesses anticipating that the local currency will appreciate in March and over the next six months. The outlook for borrowing costs, however, remains a concern, as businesses expect an increase in lending rates that could impact expansion plans.
Businesses across all sectors expressed confidence in the economy, with the Industry sector reporting the highest level of optimism. The Mining & Quarrying and Electricity, Gas & Water Supply sectors reported the highest expansion plans for March 2025, indicating continued investment in resource-driven and utility sectors.
However, major challenges persist, dampening the ease of doing business. High interest rates remain a primary concern, along with insecurity, inadequate power supply, high taxes, financial difficulties, and excessive bank charges. These challenges have made it difficult for many companies, especially small and medium enterprises, to expand their operations or invest in new opportunities.
While businesses express confidence in economic prospects, households continue to struggle under the weight of inflation and economic hardship. The CBN’s Consumer Expectation Survey Report revealed that consumer sentiment remained negative, with a Consumer Outlook Index of -19 in February, though this marks an improvement from -23 recorded in January. The negative sentiment reflects widespread concerns over high prices of essential goods and services, which many Nigerians believe are still beyond affordable levels.
The survey indicates that households expect further increases in the cost of housing, rent, telecommunications, vehicles, and electricity over the next six months. The rising cost of living continues to erode disposable income, making it harder for families to afford basic necessities. While consumer optimism is projected to gradually improve over the next three to six months, it remains unclear whether this will translate into real economic relief for the majority of Nigerians.
The broader impact of this growth has been slow to reflect on the daily lives of Nigerians, raising skepticism among the general public about the true state of the economy. Many households continue to grapple with high inflation, and reduced purchasing power, making it difficult for them to feel the effects of reported economic improvements.
Against this backdrop, many Nigerians remain doubtful that these reports of economic expansion will bring immediate benefits. The disconnect between macroeconomic indicators and the reality faced by ordinary citizens is becoming more pronounced. Although businesses foresee a stronger economy, households have been forced to prioritize essential spending over major purchases such as houses and cars. Many are redirecting their income toward food and other essential household items, a sign that economic growth has not yet eased the financial burden on the public.