Economists and investment researchers at the Centre for the Study of the Economies of Africa (CSEA), a leading research firm with primary focus on developments in African economies, have advised the Federal Government on fiscal and other economic strategies required to improve the nation’s Purchasing Managers’ Index (PMI), despite the current whirlwinds.
The researchers, in the firm’s ‘Nigeria Economic Update Issue 5’ released on February 5, 2024, noted that the Stanbic IBTC PMI report for January 2024 indicated the country’s headline Purchasing Managers’ Index (PMI) increased from 52.7 in December 2023 to 54.5 in January 2024, suggesting a notable improvement in business conditions.
According to the report, the recovery in new orders, which began in December, gathered momentum in January while there was an increase in the number of new businesses.
Similarly, the Stanbic IBTC PMI report further showed that business activity improved, and companies expanded their purchasing activities, with input stockpiles reflecting plans for further output improvements in the coming months.
However, the report reflected that employment grew slowly during the same period of strengthening recovery, amid reports that firms were having difficulty paying employees.
To consolidate on the PMI modest improvements, the CSEA experts advised the Federal Government to bolster the PMI by creating a business-friendly atmosphere through the reduction of red tape, and the provision of specific financial incentives that may encourage additional expansion in the private sector.
According to them, this can be achieved through partnering with financial institutions that may provide additional funds in form of guarantees and tax credits.
The analysts further canvassed: “The government should also prioritise building and maintaining infrastructure to enhance logistics and facilitate the timely delivery of products and services.
“While businesses continue to thrive in the face of rising inflation and a weakened currency, there is a need for the government to address these issues to sustain the growth outlook and avert job losses”, the CSEA experts added.
