Nigeria’s economic expansion suffered a setback in April 2026 as the latest Purchasing Managers’ Index (PMI) released by the Central Bank of Nigeria (CBN) slipped to 49.4 points, signalling a contraction in business activity and ending a 16-month growth run.
The drop below the 50-point threshold reflects weakening demand conditions, declining output, and cautious business sentiment across key sectors of the economy. The contraction was most pronounced in the industrial and services sectors, while agriculture showed relative resilience, helping to moderate the overall decline.
According to the CBN report, output fell to 49.7, new orders dropped sharply to 48.4, and employment weakened to 49.6, indicating a broad-based slowdown. Businesses also adjusted inventory levels downward in response to softer demand and uncertain market conditions.
In separate reactions to The Ameh News, economic and financial experts attributed the contraction to a mix of structural challenges, policy constraints, and demand-side pressures.
Celestine Ukpong, an economist, noted that the decline reflects a fragile demand environment worsened by persistent inflationary pressures and reduced consumer purchasing power.
“What we are seeing is not entirely surprising. Inflation has eroded household income, and when consumers cut spending, businesses inevitably scale back production. The PMI contraction is essentially a mirror of weak demand fundamentals,” he said.
Ukpong added that tight monetary conditions, aimed at curbing inflation, may also be limiting access to credit for businesses, thereby slowing expansion and investment.
On his part, Dr Ejike Nduilo, a public relations expert and founder of Henryjvaleens, pointed to declining business confidence and policy uncertainty as critical factors behind the downturn.
“There is a perception challenge in the market. Investors and business owners are becoming increasingly cautious due to inconsistent policy signals and macroeconomic volatility. When confidence drops, activity slows, and that is clearly reflected in the PMI data,” he explained.
Dr Nduilo emphasised the need for coordinated policy communication and stronger engagement between the government and the private sector to rebuild trust and stimulate economic activity.
Also speaking, Peter Adebayo, a Fellow Chartered Accountant, highlighted cost pressures and operational challenges faced by businesses.
“Rising input costs, exchange rate volatility, and energy expenses are squeezing margins across industries. Many firms are operating below optimal capacity, which explains the decline in output and hiring,” Adebayo said.
He further warned that unless cost conditions stabilise and access to financing improves, the contraction could deepen in subsequent months.
Despite the downturn, analysts note that the agriculture sector’s resilience provides a temporary buffer, although it may not be sufficient to offset weaknesses in other sectors if current trends persist.
The April PMI contraction, though marginal, signals a potential turning point for Nigeria’s economy, raising concerns about the sustainability of its recovery path. Experts agree that targeted fiscal and monetary interventions, alongside structural reforms, will be crucial to restoring growth momentum and strengthening economic resilience.
Nigeria records economic contraction in April 2026 as CBN PMI drops to 49.4. Experts cite inflation, weak demand, policy uncertainty, and rising costs as key drivers.
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