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Nigeria's economy exits contraction, but households remain pessimistic
🇳🇬 Nigeria /Economy & Trade

Nigeria's economy exits contraction, but households remain pessimistic

From Vanguard · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Nigeria's economy returned to expansion in June, with the Purchasing Managers' Index (PMI) rising to 50.1 points, driven by growth in the agriculture sector.
  • Despite economic recovery signs, household expectations surveys show Nigerians remain pessimistic about current economic conditions, though optimistic about the medium term.
  • Business confidence among Nigerian firms also declined for the fourth consecutive month in June, indicating persistent economic challenges.

Nigeria's economy has exited its contractionary phase, registering a modest recovery in June as the Purchasing Managers' Index (PMI) climbed to 50.1 points from 49.6 in May. This rebound was primarily fueled by sustained expansion within the agriculture sector, which has now seen 23 consecutive months of growth.

The composite PMI rose to 50.1 points in June 2026, signalling a return to expansion in overall economic activity after the contraction recorded in May 2026.

— Central Bank of Nigeria (CBN)The CBN's PMI Report indicating the economy's exit from contraction.

However, this positive economic indicator contrasts sharply with the sentiment among Nigerian households. According to the Central Bank of Nigeria's (CBN) Household Expectations Survey, citizens remain pessimistic about the prevailing economic conditions. While there's a glimmer of optimism regarding the medium-term outlook, current realities are weighing heavily on consumer confidence.

The Agriculture PMI increased to 52.1 points in June 2026 from 50.9 points in May 2026, indicating stronger growth momentum and marking the twenty-third consecutive month of expansion in the sector.

— Central Bank of Nigeria (CBN)The CBN's PMI Report detailing the strong performance of the agriculture sector.

Further compounding the economic unease, business confidence among Nigerian firms has seen a continuous decline, falling for the fourth consecutive month in June. This trend suggests that businesses are facing persistent challenges, despite the overall PMI returning to expansionary territory.

The Industry PMI stood at 49.5 points in June 2026, indicating a contraction in industrial activity.

— Central Bank of Nigeria (CBN)The CBN's PMI Report highlighting the ongoing pressure in the industrial sector.

The CBN's report highlights that while agriculture is thriving, the industrial and services sectors continue to struggle, with their respective PMIs indicating contraction. Easing input and output price pressures were noted, offering a cautiously optimistic outlook for near-term economic growth, but the dual sentiment of economic recovery alongside household and business pessimism underscores the complex economic landscape.

The Services PMI registered 49.4 points in June 2026, reflecting a contraction in business activity within the sector.

— Central Bank of Nigeria (CBN)The CBN's PMI Report noting the contraction in the services sector.
DistantNews Editorial

Originally published by Vanguard in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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