The economic challenges posed by the reforms of President Tinubu’s administration is real. In September alone, Nigerian businesses faced a tough period, with nearly half of them raising prices due to inflation.
The Stanbic IBTC report showed a decline in business confidence, driven by rising petrol and input costs, along with a weakening naira.
You see, September brought tough times for Nigerian businesses, forcing nearly half of them to increase the prices of their products and services.
According to the Stanbic IBTC Purchasing Managers’ Index (PMI), the business environment in the country continued to struggle with a score of 49.8.
This marked the third consecutive month below 50, signaling worsening conditions.
During the month, businesses faced their highest input costs in six months.
Also, the report highlighted how the naira’s weakening and rising petrol prices added to transportation and logistics expenses.
These increased costs were passed down to consumers.
Almost 49% of companies raised their prices in response.
However, wage growth slowed, reaching its lowest rate in 18 months, despite some firms trying to support workers facing higher living costs.
Struggling To Keep Up
Even though higher prices reduced customer demand, businesses saw a slight increase in new orders for the second month straight.
However, this wasn’t enough to boost overall output, which declined for the third month.
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Agriculture and manufacturing showed some growth, but sectors like wholesale, retail, and services continued to suffer.
Employment increased for the fifth consecutive month, but only slightly, as many firms limited hiring to control costs.
Confidence in future business conditions also fell, hitting the second-lowest level ever, just above the record low seen in July.
Also, those still optimistic pinned their hopes on better business conditions and future expansion.
Inflation Persistent Threat
Despite inflation slowing to 32.15% in July and August, analysts expect it to rise in September.
This is due to the naira’s continued weakness and rising petrol prices by NNPCL.
By the end of September, the naira closed at ₦1,541 to the dollar in the official market but plunged to ₦1,700 in the parallel market.
Meanwhile, petrol prices soared to nearly ₦1,000 per litre, with some states seeing even higher rates, especially at NNPC stations.
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