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By Uche Usim
Nigeria’s economy slowed down in April 2026 after more than a year of steady growth.
According to a Central Bank of Nigeria report released yesterday, business activity dropped to 49.4 on the Purchasing Managers’ Index scale, which signals a contraction because anything below 50 means the economy is shrinking rather than growing.
The decline was mainly felt in industries and services, where businesses reduced output and activity weakened.
However, the agriculture sector still held up relatively well, helping to soften the overall impact of the slowdown.
The report read, “The composite Purchasing Index (PMI) for April 2026 stood at 49.4 points, marginally below the 50-point threshold, indicating a slight contraction in aggregate economic activity following sixteen (16) consecutive months of expansion.”
This was driven largely by weaker demand and slowing business momentum across key sectors.
A closer look at the composite index reveals that the downturn was broad-based. Output slipped to 49.7, reflecting reduced production levels, while new orders fell more sharply to 48.4, signalling that fewer customers are placing fresh demand for goods and services. Employment also weakened, dropping to 49.6, as firms slowed hiring in response to uncertain business conditions. Together, these indicators point to a general loss of momentum across the economy. Inventory trends accentuated the slowdown.
The stock of raw materials index declined to 48.7, showing that businesses reduced their purchasing of inputs, likely to manage costs and avoid excess stock amid uncertainty. However, there was a small positive signal in supply chain performance, as supplier delivery time improved slightly to 50.9, suggesting marginal efficiency gains in logistics despite broader challenges.
Out of the 36 subsectors surveyed, 19 recorded contraction, one remained unchanged, and 16 still managed to expand. This mixed performance highlights the uneven nature of the slowdown. Primary metals recorded the steepest decline, reflecting pressure in heavy industrial production, while forestry stood out as the fastest-growing subsector during the period.
The report also pointed to external shocks as contributing factors, particularly rising geopolitical tensions in the Middle East, which may have disrupted global supply chains, increased uncertainty, and weakened business confidence.
Sectoral analysis shows that both industry and services bore the brunt of the slowdown. The industrial PMI fell to 49.5, signalling marginal contraction. While output remained slightly above the threshold at 50.2, new orders and employment weakened to 49.5 and 48.7 respectively. Raw material inventories also dropped sharply to 46.8, indicating reduced input procurement. Eight of 17 industrial subsectors contracted, reversing earlier growth patterns.
The services sector experienced an even sharper decline, with PMI falling to 48.8, marking its first contraction in 14 months. Business activity, new orders, employment, and inventories all weakened, reflecting broad softening in demand. Ten of 14 services subsectors contracted, with transportation and warehousing recording the steepest fall, while educational services posted the strongest growth.
In contrast, agriculture remained relatively resilient, maintaining expansion for the 21st consecutive month with a PMI of 50.2. Growth was driven by farming activities and employment, though weakening new orders and inventories suggest underlying pressure building within the sector.
At the same time, inflationary pressures intensified, as both input and output prices rose by 3.2 points. Notably, firms in industry and agriculture increased output prices faster than input costs, indicating efforts to protect profit margins.
Overall, the April PMI signals a fragile economic outlook, where weakening demand, rising costs, and external uncertainties are beginning to erode earlier growth momentum.
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