The Nigerian private sector continued to face challenges in November, although the extent of the decline eased compared to the previous month, according to Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank. Oni, commenting on a recent report, explained that while private sector activities remained under pressure, the pace of deterioration slowed, primarily driven by a modest recovery in new orders.
The decrease in new orders, which had sharply dropped in October, reversed in November. This marked a positive shift, with new orders increasing in three of the last four months, though the latest growth was modest at best. Despite this, some businesses reported signs of demand picking up, while others noted that high operational costs continued to dampen customer activity, limiting the potential for more substantial growth.
The report also highlighted several ongoing economic challenges contributing to the difficulties faced by businesses. Elevated energy prices, rising raw material costs, and a persistently weak currency all combined to intensify inflationary pressures throughout the month. As a result, many companies found themselves grappling with higher input costs, which further strained their profitability and operational stability.
In summary, while there are small glimmers of improvement in demand, the Nigerian private sector’s overall outlook remains fragile, burdened by persistent inflation and rising costs. The latest developments suggest a mixed picture, with cautious optimism amidst continued financial pressures.
Gathered by:Onoro Promise Edesiri