In February, the private sector shrank due to a cash shortage.

 According to a monthly assessment by Stanbic IBTC, the condition of Nigeria's private sector businesses has deteriorated amid the devaluation of the currency.

According to the research from Stanbic IBTC Bank Nigeria, the Purchasing Managers Index dropped from 53.5 in January 2023 to 44.7 in February of the same year.

The bank reported that the most recent data indicated an end to a 31-month streak of expansion and the first decrease in private sector business conditions in more than two years.

Due to the nationwide cash shortage issues that occurred throughout the month, "severe cutbacks in output and new orders were noticed."

Businesses reportedly reduced hiring and purchasing activity.

Part of the report's summary stated, "Meanwhile, ongoing fuel shortages caused gasoline pump prices to rise, adding to pricing pressures and causing supplier supply delays.

"Input inflation was at its lowest level since June 2020, although it was still significantly higher than the series average. In response, output prices increased again sharply, but at their slowest rate in four months.

The belief that the economy will improve, together with expectations for business development and investment, helped business sentiment reach a five-month high.

In elaborating on the prediction, the paper stated that "according to Trading Economics global macro models and analysts forecasts, the Nigerian composite PMI is predicted to be 54.00 points by the conclusion of this quarter."

Our econometric models predict that the Stanbic IBTC Bank Nigeria PMI will trend at 54.40 points in 2024 and 56.00 points in 2025.

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