Nigeria’s private sector maintained its expansionary momentum in July 2026, with the Central Bank of Nigeria (CBN) Purchasing Managers’ Index (PMI) rising to 51.1 points. This growth was primarily supported by continued expansion in the agriculture and services sectors.
The latest PMI report released by the CBN showed that overall business conditions improved during the month. However, the industrial sector remained in contraction, highlighting the uneven pace of the country’s economic recovery.
According to the apex bank, easing price pressures, stronger business activity, and improving employment conditions contributed to a cautiously positive outlook. Key components of the composite PMI registered expansion, including output at 51.8, employment at 51.1, and new orders at 50.8. The suppliers’ delivery time index stood at 51.3 points, signaling quicker response times, while the composite stock of raw materials index remained in contraction at 49.6 points.
Agriculture and Services Drive Expansion
The agricultural sector remained the strongest performer in the Nigerian economy, with its PMI rising to 52.1 points in July. This marks the twenty-fourth consecutive month of expansion for the sector.
Within agriculture, general farming activities, new orders, employment, and inventories all remained in expansionary territory. Agricultural support services recorded the strongest growth among the subsectors, while crop production was the only agricultural subsector to record a contraction during the month.
The services sector also returned to growth after three consecutive months of contraction, with its PMI increasing to 51.1 points from 49.4 points in June. Eight of the eleven services subsectors expanded during the month, led by administrative and support services, while transportation, courier, and storage recorded the weakest performance.
Industrial Sector Remains Under Pressure
Meanwhile, the industrial sector remained under pressure, although operational conditions improved slightly. The industry PMI rose marginally to 49.6 points in July from 49.5 points in June, indicating a slower pace of contraction.
The CBN attributed the weakness in the industrial sector largely to lower output, declining new orders, and reduced raw material inventories. Despite these challenges, employment and supplier delivery times remained in expansionary territory, suggesting continued resilience in operational activities.
Among the sixteen industrial subsectors surveyed, eight expanded while the remaining eight contracted. Electrical and electronics recorded the strongest growth across all sectors, while oil refining posted the steepest decline in business activity.
Macroeconomic Context and Food Security Concerns
The PMI data arrives alongside a slight moderation in inflation. Nigeria’s headline inflation rate edged lower to 15.91% in June 2026, compared to 15.93% recorded in May, and significantly lower than the 25.29% recorded in June 2025. However, monthly food inflation accelerated to 3.75% in June, up from 2.98% in May.
The agricultural sector previously recorded a strong recovery in Q1 2026 with real growth of 3.15%, compared to just 0.07% in the corresponding period of 2025. Despite this recovery, food security concerns persist across the country.
The United Nations Food and Agriculture Organization (FAO) has warned that about 34.7 million Nigerians could face severe food insecurity during the lean season between June and August 2026. To address these challenges, the World Bank approved a $500 million International Development Association (IDA) credit in April 2026 to boost agricultural productivity under the Nigeria Sustainable Agricultural Value-Chains for Growth (AGROW) Project.
