Nigerian private sector activity slowed in February as new orders and production levels fell due to a shortage of hard currency that made it difficult for companies to source raw materials, central bank business surveys showed on Wednesday.
The central bank’s purchasing managers index (PMI) of private-sector activity dropped to 45.4 points in February from 50.6 points in January, falling below the 50 point line that denotes increases in activity.
Nigeria has been running short of dollars as a result of lower global prices for oil, its major export, and the economy shrank last year for the first time in quarter of a century.
The central bank’s PMI index for manufacturers alone fell to 44.6 percent in February from 48.2 in January, while its non-manufacturing PMI declined for the 14th straight month to 44.5 in February.
The PMIs are one set of indicators watched by the central bank’s monetary policy committee when it sets interest rates.
Bankers say lenders have also slowed credit and tightened access to business and individuals to curb a rise in non-performing loans, all of which also puts a brake on business activity.
The PMI report said 14 out of 16 sub-sectors including transport equipment, fabricated metals, chemicals and pharmaceuticals reported declines in February. The food, beverage and tobacco product sectors all expanded, however.