Economy
Stanbic IBTC PMI for Private Sector Shows Rise in Business Confidence
By Modupe Gbadeyanka
The private sector in Nigeria sustained growth in January 2025, though lower than what was achieved in the preceding month.
The Purchasing Managers’ Index (PMI) of Stanbic IBTC Bank for the month stood at 52.0 points compared with the 52.7 points recorded in December 2024.
It was observed that new orders and business activity maintained an upward trend amid a large improvement in business confidence as firms expanded employment, purchasing and inventories.
Although input costs and output prices continued to rise rapidly, respective rates of inflation were much slower than seen in December.
Business activity rose solidly in January, after having returned to growth in December. That said, the rate of expansion eased from the previous month. Activity increased across three of the four monitored sectors, the exception being wholesale and retail.
Signs of improving customer demand and a greater willingness among clients to commit to new projects supported the rise in output and also contributed to the growth of new orders. As was the case with activity, new business increased for the second month running, but at a softer pace than in December.
Companies were also much more optimistic regarding the future in January, with business expansion plans and marketing activities set to support output growth over the coming year. Although remaining relatively muted overall, the uplift in sentiment seen at the start of the year was the largest since the survey began just over 11 years ago.
There were signs of inflationary pressures softening in January. Although rates of increase in both input costs and output prices remained elevated, in both cases the rises were much weaker than seen in December. Overall input price inflation was the slowest since April 2024, while charges increased at the weakest pace in six months.
Efforts to satisfy customer requirements in a timely manner led companies to expand their staffing levels, purchasing activity and inventory holdings at the start of the year. In each case, the rises were the second in as many months. In particular, the accumulation of stocks of purchases was the most pronounced in just over a year and a half.
The attempts to get through projects quickly meant that firms were more successful in depleting backlogs of work, which decreased at a solid pace that was the most pronounced since June 2022. Finally, suppliers’ delivery times continued to shorten amid good arrangements with vendors and prompt payments.
“Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024. We note an increase in both output (53.7 vs December 2024: 54.8) and new orders (52.6 vs December 2024: 53.2) although slightly weaker than that seen at the end of 2024, on account of improving customer demand and more willingness to commit to new projects.
“Given the rising new orders, companies took on additional workers in January – representing the second month running in which this has been the case.
“Elsewhere, input prices increased at a slower pace while the pace of increase in output prices is the slowest since July 2024.
Headline inflation averaged 33.18% y/y in 2024 from an average of 24.52% y/y in 2023 mostly driven by significant FX depreciation; renewed petrol price increases in line with full petrol price liberalization; structurally low food supplies exacerbated by high extreme weather conditions; and increased food demand, especially during the festive season.
“We expect a moderation in the inflation rate in 2025 although the pace of the moderation is only likely to be faster in late Q3:25. Notably, we expect headline inflation to average 30.5% y/y in 2025 and end the year at 27.1% y/y.
“In 2025, we project the non-oil sector to grow by 3.2% y/y from an estimated 3.0% y/y in 2024. Growth is likely to pick up across manufacturing and trade, while ICT and finance & insurance should continue to play a big role in economic performance.
“However, agriculture will likely still lag its long-term average amid lingering internal security challenges, high input costs, and extreme weather conditions. Within the manufacturing sector, cement, food and chemicals & pharmaceutical products are key sub-sectors that have been exceeding the manufacturing sector’s growth since Q4:22,” the Head of Equity Research West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said.
By Aduragbemi Omiyale
The presidential candidate of the Labour Party in the 2023 general elections, Mr Peter Obi, has expressed worry over plans by the administration of President Bola Tinubu to spend about $11.6 billion on debt servicing.
In a post on his social media platform on Monday, the opposition politician criticised this move, saying it is not good for the country.
He also said this action “should concern anyone interested in the country’s economic future and long-term development.”
The former Governor of Anambra State kicked against the penchant of the government to borrow from various sources without anything to show for it.
“There is nothing inherently wrong with borrowing when it is guided by prudence and directed toward productive investment, he noted, stressing that countries such as Japan, the United Kingdom, the United States, the United Arab Emirates, Singapore, and Indonesia are all heavily indebted, yet their borrowings are largely channelled into education, healthcare, infrastructure, and innovation – sectors that generate long-term economic returns and sustain repayment capacity.”
According to him, “despite high debt levels, their obligations remain more manageable because they are tied to measurable productivity.”
He said, “Nigeria’s situation, however, is markedly different. A huge proportion of past borrowing has been directed toward consumption, with limited visible or sustainable developmental outcomes to justify the scale of indebtedness.”
“It is also important to note that a huge portion of the debt currently being serviced was accumulated under the Tinubu administration itself, while borrowing has continued at a significant pace. The administration’s recent external borrowing alone includes about $6 billion (from First Abu Dhabi Bank in the UAE—$5 billion, and UK Export Finance via Citibank London—$1 billion), a further $1.25 billion under consideration from the World Bank, and an additional $516 million arranged through Deutsche Bank, bringing the latest known external loan commitments to roughly $7.8 billion. In addition, domestic borrowing through monthly bond issuances continues to add to the overall debt stock,” the businessman also stated.
“Against this backdrop, Nigeria’s 2026 budget shows that health is N2.46 trillion, education is N2.56 trillion, and poverty alleviation is N865 billion, giving a combined total of about N5.885 trillion for these three critical sectors.
“By comparison, debt servicing at about $11.6 billion (approximately N17–N18 trillion, depending on exchange rate assumptions) is almost three times higher than the total allocation to health, education, and social protection combined. This imbalance highlights a troubling fiscal reality in which debt obligations increasingly crowd out investment in human capital and poverty reduction.
“Moreover, even within the limited allocations to these sectors, funds may not be fully released, and a significant portion of what is eventually released could be misappropriated,” he further stated.
Mr Obi said, “The central issue is not borrowing itself, but whether borrowed funds are being converted into measurable productivity, inclusive growth, and improved living standards. Without this, debt servicing shifts from being a temporary fiscal obligation to a long-term structural burden that constrains development and deepens economic vulnerability.”
By Adedapo Adesanya
Pathway Advisors Limited, an issuing house and financial advisory firm, has announced the successful completion of the Series 2 Commercial Paper issuance for Veritasi Homes & Properties Plc.
The Series 2 offer, issued under Veritasi Homes’ newly registered N20.00 billion Commercial Paper Programme, raised N16.76 billion, significantly above its initial N12.00 billion target on the back of strong institutional demand.
This issuance builds on the company’s track record in the Nigerian debt capital market and follows the recently concluded N10 billion 3-year 20 per cent Series 1 Fixed Rate Bond Issuance, further reinforcing investor confidence in Veritasi Homes’ strong credit profile.
The 364-day tenor instrument attracted robust participation from a diverse pool of institutional investors, underscoring sustained confidence in the Company’s financial strength, operating model, and governance standards.
Commenting on the deal, the Founder/CEO of Pathway Advisors Limited, Mr Adekunle Alade (MBA, FCA, M.CIod), noted that the outcome further validates investor appetite for well-structured transactions in the Nigerian capital market.
“The strong oversubscription speaks to the market’s confidence in Veritasi Homes’ performance, governance, and repayment track record. We are pleased to continue supporting issuers with strong fundamentals in accessing efficient funding.’’
He further highlighted that Veritasi Homes’ consistent market activities since 2022, including successful issuances and full redemption of matured obligations, continue to strengthen its reputation among institutional investors.
“Pathway Advisors Limited remains committed to maintaining its leadership position within Nigeria’s capital markets through the origination and execution of transformative, value-driven, and commercially viable transactions by deploying innovative financial solutions and facilitating strategic capital formation across critical sectors.
“We are committed to supporting credible corporates in accessing efficient short-term and long-term financing solutions within the Nigerian capital market,” he said in a statement on Monday.
Speaking on the transaction, the Managing Director/CEO of Veritasi Homes & Properties Plc, Mr Nola Adetola, described the outcome as a strong endorsement of the company’s fundamentals.
“This result reflects the resilience of our business model, our growing market reputation, and the continued trust of the investment community. We are grateful to all institutional investors for their confidence in Veritasi Homes.”
He added that the proceeds from the issuance will be deployed to support the company’s working capital requirements, enhance liquidity, and complete the ongoing development activities across its real estate portfolio.
Mr Adetola also commended Pathway Advisors Limited for its advisory and arranging role in the successful execution of the transaction.
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has approved the transition to the T+1 settlement cycle for capital market transactions from June 1, 2026.
This is coming some months after Nigeria moved from the T+3 settlement cycle to the T+2 settlement cycle.
The T+ settlement cycle is the number of working days required to complete a capital market transaction, such as the trading of securities, shares, and others, from the first day the trade was executed by an investor.
In a notice on Monday, the SEC, which is the apex capital market regulator in Nigeria, said it was authorising the new system to “promote an efficient, fair, and transparent capital market.”
Under the new arrangement, equities and commodities traded by investors at the market would be cleared and settled by the Central Securities Clearing System (CSCS) within one day.
The agency noted that the migration to a T+1 settlement cycle forms part of its ongoing market modernisation initiatives aimed at enhancing market efficiency and strengthening risk management. reducing counterparty exposure, improving liquidity, and aligning the Nigerian capital market with international standards and global best practices.
“Accordingly, all eligible trades executed in the Nigerian capital market shall settle one business day after the trade date (T+1),” a part of the statement noted.
It was stressed that “Friday, May 29, 2026, shall be the final trading day under the existing T+2 settlement cycle. Trades executed on Friday, May 29, 2026, and Monday, June 1, 2026, shall both settle on Tuesday, June 2, 2026. All trades executed from Monday, June 1, 2026, onward shall be subject to the T+1 settlement cycle.”
SEC tasked all capital market operators, securities exchanges, clearing and settlement infrastructure providers, custodians, registrars, issuers, and other relevant stakeholders to take all necessary measures to ensure full operational readiness and compliance with the new settlement framework.
“Market participants are expected to review and align their systems, processes, controls, and operational workflows ahead of the implementation date,” it further stated, promising to continue to engage stakeholders and monitor the implementation process to ensure an orderly and seamless transition.
The regulator said it remains committed to strengthening market integrity, enhancing investor confidence, and fostering the development of a modern. resilient and globally competitive Nigerian capital market.
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