By Stephen Simon
Nigeria’s economy expanded for the fourth consecutive month in September, but fresh data show that the improvement in business activity has yet to translate into stronger household confidence or easier economic conditions for many Nigerians.
The Central Bank of Nigeria’s September Composite Purchasing Managers’ Index rose to 53 points from 52.7 points in August, indicating continued expansion across industry, services and agriculture. Output, new orders, employment and raw-material inventories all recorded growth during the month.
The industrial sector provided a major boost to the overall performance, with its PMI climbing from 50.6 points in August to 52 points in September. Services also remained in expansion territory at 53.2 points, while agriculture recorded its 26th consecutive month of expansion despite a slight decline in its PMI.
However, the positive headline figures conceal continuing pressure on businesses and households. The latest CBN survey showed that household sentiment deteriorated sharply during the month, while inflation concerns remained significant. Businesses also continued to identify taxation, insecurity and high interest rates among their major constraints.
The latest development is particularly significant because rising economic activity is occurring alongside increased household borrowing. Separate CBN data reported on Monday showed that personal loans reached an estimated N2.06 trillion in May, accounting for 64.78 per cent of the N3.18 trillion in outstanding consumer credit. Consumer credit itself increased by N50 billion in one month.
The figures suggest that while businesses may be recording increased orders and output, many households are still relying increasingly on credit to cope with financial pressures. The contrast is likely to intensify debate over whether Nigeria’s improving macroeconomic indicators are translating into meaningful improvements in living standards.
Another concern is rising input costs. The September PMI report showed that composite input prices increased while output prices declined, indicating continuing pressure on business margins despite the overall expansion in activity.
For the Federal Government, the latest figures offer evidence that its economic reforms are producing greater activity and stability. For millions of Nigerians, however, the more important question remains whether the recovery will eventually result in cheaper living costs, stronger purchasing power, better jobs and improved household welfare.
