Economy
Business Activity Falls First Time in Eight Months
By Modupe Gbadeyanka
The Stanbic IBTC Purchasing Managers’ Index (PMI) for July 2024 has indicated that the Nigerian private sector moved back into contraction territory.
A statement from the lender disclosed that the index of the performance of the business environment closed at 49.2 points compared with 50.1 points recorded in June as steep price pressures hit demand and resulted in renewed reductions in both business activity and new orders.
Business Post reports that readings above 50.0 signal an improvement in business conditions in the previous month, while readings below 50.0 show deterioration, which occurred in the period under review, the first in eight months.
Input costs and selling prices continued to rise rapidly, although there were some signs that efforts to secure sales resulted in a softer pace of output price inflation.
The renewed worsening in the health of the private sector mainly reflected the first reductions in output and new orders since November last year. In both cases, rates of decline were only modest.
Anecdotal evidence continued to highlight the negative impact of sharp price increases on customer demand, with clients often unwilling or unable to commit to new projects.
Three of the four broad sectors covered by the report saw business activity decrease in July, the exception being manufacturing where production increased.
Selling prices continued to increase sharply at the start of the third quarter as companies passed higher input costs through to their customers. This was despite the rate of inflation easing to the slowest since May 2023 amid reports from some panellists that they had lowered charges as part of efforts to secure sales.
The Head of Equity Research for West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said, “The Stanbic IBTC headline PMI declined for the second consecutive month to 49.2 points in July – its lowest level since November 2023.
“Anecdotal evidence continued to highlight the negative impact of sharp price increases on customer demand, resulting in renewed reductions in both business activity and new orders.
“Notably, output and new orders printed below 50.0 thereby ending a seven-month sequence of expansion and reinforcing a renewed worsening in the health of the private sector.
“Even as output and new orders declined, companies continued to expand their staffing levels during the month. Moreover, the rate of job creation picked up to the strongest in 2024 so far.
“Meanwhile, overall input prices continued to rise sharply in July with the rate of inflation quickening for the third month running and were the fastest since March.
“Although output prices continued to rise rapidly during July, the pace of inflation eased from that seen in June and was the slowest since May 2023. Where selling prices increased, panellists linked this to higher input costs.
“On the other hand, some companies lowered charges as part of efforts to attract customers. That said, companies remained confident overall that output will increase over the next 12 months, reflecting business expansion plans including efforts to start exporting and open more branches.
“On a year-on-year basis, headline inflation may have peaked in June, with moderation expected in H2:24 as the year-on-year effects of PMS subsidy removal (which induced higher fuel prices) and significant currency depreciation (which accompanied the FX unification) fade.
“This, in addition to the commencement of the primary harvest season in September, is likely to provide some respite for consumers, thereby likely supporting a slight improvement in domestic economic activities in H2:24.”
Further increases in purchase prices and staff costs were registered in July. Purchase price inflation quickened to a four-month high, often due to currency weakness but also higher raw material costs.
Meanwhile, the rise in employee expenses was broadly in line with that seen in June as companies continued to help workers with higher living costs, particularly those related to transportation.
The renewed decline in output was accompanied by a reduction in business confidence, with firms at their least optimistic since the survey began. That said, business expansion plans meant that firms still expected output to rise over the coming year.
Companies scaled back purchasing activity, with reduced demand for inputs and prompt payments helping lead to a further shortening of suppliers’ delivery times.
Meanwhile, stocks of inputs increased. Employment also continued to rise slightly, with the pace of job creation quickening to the fastest in 2024 so far. Higher staffing levels and a drop in new orders meant that backlogs of work were cleared for the second consecutive month.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Fresh foreign exchange (forex) demand pressure saw the Naira depreciate against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 22, by N5.46 or 0.4 per cent to trade at N1,353.91/$1 compared with the preceding day’s value of N1,348.45/$1.
It was the same outcome for the local currency in the official market after it depreciated against the Pound Sterling by N4.13 to close at N1,825.88/£1, in contrast to the preceding session’s N1,821.75/£1, and against the Euro, it dropped 72 Kobo to finish at N1,582.72/€1 versus N1,582.00/€1.
But the Nigerian Naira appreciated against the US Dollar at the GTBank FX desk by N2 during the session to quote at N1,361/$1 compared with Wednesday’s closing price of N1,361/$1, and at the parallel market, it closed flat at N1,375/$1.
FX Pressure came as data showed that NFEM interbank turnover was N28.117 million, lower than the N66.084 million recorded the previous day.
Concerns over liquidity pressures, policy transparency, and confidence in Nigeria’s FX market continue to grip the market while the country’s foreign reserve declines further, even as the Central Bank of Nigeria (CBN) recently said that the recent decline in Nigeria’s external reserves should not be a cause for concern.
Global developments also played a significant role, as rising geopolitical tensions boosted demand for the US Dollar, further weakening emerging market currencies, including the Naira.
As for the cryptocurrency market, there was a mixed outcome as traders reacted to rising geopolitical tensions from the Iran war and fresh inflation data from Japan.
Japanese inflation ticked higher in March, stoking expectations that the Bank of Japan may soon signal rate hikes, which could strengthen the yen and unsettle global risk assets.
The Iran conflict has disrupted oil flows through the Strait of Hormuz, raising energy costs and inflation risks worldwide and potentially complicating efforts by the Federal Reserve to cut interest rates.
Ethereum (ETH) declined by 1.8 per cent to $2,316.53, Bitcoin (BTC) lost 0.6 per cent to sell at $77,935.53, Solana (SOL) fell by 0.5 per cent to $85.67, and Binance Coin (BNB) dropped 0.4 per cent to sell for $634.85.
However, Dogecoin (DOGE) appreciated by 1.4 per cent to $0.0976, Ripple (XRP) grew by 0.7 per cent to $1.43, Cardano (ADA) expanded by 0.6 per cent to $0.2493, and TRON (TRX) improved by 0.2 per cent to $0.3279, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
The resilience shown by Nigerian Breweries Plc in the 2025 fiscal year, despite a volatile macroeconomic environment, which consumed several businesses, has not got without notice.
Shareholders of the brewery giant applauded the board and management for the strong recovery and improved profitability recorded in the year.
At the company’s 80th Annual General Meeting (AGM) on Wednesday, April 22, 2026, in Lagos, they attributed these achievements to disciplined cost management and a significant reduction in finance expenses.
“We are proud of how the company has withstood the ups and downs of a challenging environment. The return to profitability and the reversal of the negative cash position recorded in the previous two financial years are commendable,” a member of the Noble Shareholders Association, Mr Owolabi Opeyemi, said at the gathering.
Also, the immediate past Secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr Eke Emmanuel, noted that the company’s resilience reflects strong leadership and a sound strategic direction.
“It is good news that we have been here for 80 years. There is no reason why we will not be here for the next 80 years with what we have achieved. To return to this level of profitability and cash position shows the Board has done an enormous amount of work,” he said.
Addressing investors at the AGM, the board chairman, Mrs Juliet Anammah, expressed confidence that the company is firmly on a recovery path following the net losses recorded in the past two years due to macroeconomic pressures and fiscal reforms.
She thanked shareholders for their continued support and reaffirmed that the company will build on its 2025 performance as it accelerates growth ambitions.
“We have a solid foundation built over eight decades, anchored on a strong portfolio of brands, an extensive nationwide sales and supply chain network, ongoing digital transformation, and most importantly, our people. These strengths remain critical to sustaining our leadership position,” the former chief executive of Jumia Nigeria said.
Ms Anammah also addressed the company’s dividend position, noting that the decision not to declare a dividend reflects the need to rebuild retained earnings impacted by prior macroeconomic shocks, particularly foreign exchange-related losses.
“We recognise the importance of dividend payments to our shareholders and sincerely appreciate your continued understanding. While we are not declaring a dividend at this time due to negative retained earnings, we are working diligently to restore the company’s financial position and return to dividend payments as soon as it is sustainable to do so,” she added.
She further noted that the board remains vigilant to external risks, including the Middle East crisis and broader macroeconomic challenges, which may impact the pace of improvement in the 2026 financial year.
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