Economic Activities Expand for Second Consecutive Month, CBN Reports
The Central Bank of Nigeria (CBN) has announced that economic activities expanded for the second consecutive month, reaching 51.4 index points in February 2025, according to its Purchasing Managers’ Index (PMI) Report. The report highlights growth in the industry, services, and agriculture sectors, signaling a gradual recovery in the Nigerian economy.
Sectoral Performance
The CBN’s PMI Report revealed that the industry, services, and agriculture sectors recorded expansion during the review period, with index points of 50.5, 51.1, and 53.1, respectively. A detailed breakdown of 36 sub-sectors showed that 21 sub-sectors reported growth, with the cement industry recording the highest expansion.
However, 13 sub-sectors experienced a decline in economic activities, with nonmetallic mineral products reporting the sharpest drop. Two sub-sectors—plastics & rubber products and accommodation & food services—remained stationary.
Business Optimism
The CBN’s Business Expectation Survey Report, also released today, indicated that businesses expressed optimism about the macroeconomy in February 2025. This optimism was attributed to a positive outlook on the exchange rate, with firms projecting a rise in borrowing costs over the next six months.
“The overall confidence index (CI) on the macroeconomy indicated that businesses were optimistic in February 2025. All sectors expressed optimism, with the industry sector recording the highest level of confidence,” the CBN stated.
The mining & quarrying and electricity, gas & water supply sectors indicated the highest expansion plans for March 2025. However, businesses identified high interest rates (75 index points), insecurity (73.9 index points), insufficient power supply (73.8 index points), high taxes (73 index points), financial problems (68.5 index points), and high bank charges (67.6 index points) as top constraints during the review period.
Consumer Pessimism
In contrast to business optimism, the CBN’s Consumer Expectation Survey Report revealed that households expressed pessimism about the macroeconomy in February, with an outlook of -19 index points compared to -23 index points in January. Consumers cited elevated prices for household items as a primary concern.
“The general consumer outlook shows a reduction in pessimism for February 2025 compared to the previous month. This shift is linked to consumers’ perceptions regarding their family income, economic condition, and family financial situation,” the CBN explained.
Households anticipated increases in the prices of housing, rent, telecommunications, vehicles, and electricity over the next six months. Despite this, consumer optimism about the overall economy is expected to gradually improve in the coming months.
Spending Patterns
The report also highlighted households’ spending intentions, revealing that consumers do not plan to allocate a substantial portion of their income to purchasing houses or vehicles. Instead, they expect to focus their spending on food and other essential household items across all periods.
Implications for the Economy
The CBN’s reports underscore a mixed economic outlook, with businesses expressing confidence in the macroeconomy while households remain cautious due to rising costs. The expansion in key sectors such as industry, services, and agriculture signals a positive trend, but challenges such as high interest rates, insecurity, and inadequate power supply continue to hinder growth.
Conclusion
The CBN’s latest reports provide a snapshot of Nigeria’s economic recovery, highlighting both progress and persistent challenges. While business optimism and sectoral expansion offer hope for sustained growth, addressing consumer concerns and structural bottlenecks will be critical to ensuring long-term economic stability and prosperity.
