Nigeria’s economic activity experienced a significant strengthening in December 2025, with the Composite Purchasing Managers’ Index (PMI) reaching an impressive 57.6 index points. This marks the strongest momentum recorded in approximately five years, indicating robust growth across various sectors. The Central Bank of Nigeria (CBN) reported this positive development, highlighting a sustained improvement that reflects continued expansion in employment-generating sectors. The December 2025 PMI survey, released by the Bank, shows the Composite Index at 57.6 index points, a testament to the nation’s economic vitality. This surge in economic activity is a positive sign for businesses and the overall Nigerian economy. How to understand Nigeria’s economic performance? Key indicators like the PMI provide valuable insights into the health of the economy, measuring expansion or contraction in business activity. Sectoral PMI readings further detailed this broad-based growth. Agriculture remained a strong performer with 58.5 points, while industry recorded 57.0 points. The services sector also contributed positively, standing at 51.9 points, signifying a healthy and diverse economic landscape during the month. The survey indicated that a substantial 32 out of the 36 subsectors monitored reported expansions. This widespread growth was evident in key indicators such as production levels, new business orders, and employment figures, underscoring the comprehensive nature of the economic rebound. What is the significance of a PMI above 50? A PMI reading above 50 indicates that the manufacturing or services sector is generally expanding, while a reading below 50 suggests contraction. The CBN attributes this improved PMI performance to the positive effects of ongoing macroeconomic stabilization measures. Efforts to enhance the operating environment and bolster business confidence are clearly yielding results, fostering job creation, production efficiency, and optimism for future economic prospects. In addition to the PMI figures, Nigeria also recorded an overall Balance of Payments (BOP) surplus of $4.60 billion in the third quarter of 2025. This represents a notable turnaround from the deficit position observed in the preceding quarter, according to data released by the Central Bank of Nigeria. The improvement in the BOP was supported by a sustained current account surplus of $3.42 billion. This surplus was driven by stronger trade performance, resilient remittance inflows, increased financial flows, and a continued accretion to external reserves, further strengthening Nigeria’s financial position. What is the Balance of Payments? The Balance of Payments is a statistical statement that summarizes economic transactions between residents of an economy and non-residents during a specific period. The goods account remained in surplus at $4.94 billion, primarily due to higher export earnings. Crude oil exports saw a significant increase, and exports of refined petroleum products also rose, indicating progress in domestic refining capacity and Nigeria’s shift towards becoming a net exporter of refined products. Workers’ remittances also played a crucial role in maintaining strong inflows, with the secondary income account recording a surplus of $5.50 billion, including a substantial $5.24 billion from Nigerians living abroad. This highlights the continued importance of diaspora contributions to the national economy. Developments in the financial account further bolstered the overall BOP outcome. Nigeria posted a net lending position of $0.32 billion, with foreign direct investment inflows rising to $0.72 billion and portfolio investment inflows remaining robust at $2.51 billion. This reflects growing investor confidence and active participation from non-residents in domestic financial instruments. The country’s external reserves experienced a healthy increase, rising to $42.77 billion by the end of September 2025, up from $37.81 billion at the end of June. This significant growth in reserves strengthens Nigeria’s external buffers and provides greater financial stability. The CBN emphasizes that these Q3 2025 BOP outcomes underscore strengthening external sector fundamentals, firmer investor confidence, and the ongoing positive impact of reforms in the foreign exchange market, monetary policy implementation, and the domestic energy sector. Nigeria’s economic activity strengthens in December as PMI hits 57.6 points, showing a robust recovery and positive outlook for the nation’s financial health.
