Higher fuel and transportation costs have driven selling price inflation among Nigerian private-sector firms to a four-month high in October 2026. According to the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI), firms increased their selling prices at the fastest pace in four months, with over 29 per cent of respondents raising their charges during the month. This rise is attributed to increased fuel, transportation, and other input costs that continue to affect production costs across the private sector.
Despite sustained economic growth, businesses in Nigeria are grappling with rising operating expenses. The Stanbic IBTC Bank PMI report showed that the headline PMI declined to 55.7 in October from 56.4 in September, indicating a slower pace of improvement in operating conditions at the start of the fourth quarter. However, business conditions remained firmly in expansion territory, supported by increases in output and new orders for the ninth consecutive month.
The expansion in business activity is a reflection of sustained customer demand and continued growth in business activity. Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, noted that output prices maintained their upward trend due to persistent increases in fuel and transportation costs that raised production expenses. Additionally, prices of building materials and food produce increased during the month.
Staff costs also increased modestly during the month, linked to the need to encourage employees to take on more work and help them deal with higher living costs. According to the report, manufacturing recorded the fastest pace of selling price inflation, narrowly ahead of the wholesale and retail sector, as businesses passed higher operating costs on to customers.
The report noted that firms continued to experience higher costs for fuel, building materials, and food products, while the increase in staff expenses remained modest. Where staff costs rose, respondents attributed the increases to salary adjustments aimed at helping employees cope with higher living costs and encouraging them to complete projects more quickly.
Despite the challenges, firms continued to expand purchasing activity for the 23rd consecutive month to meet strong customer demand and prepare for future workloads. Stocks of purchases also accumulated sharply, although at a slower pace than in September, while suppliers’ delivery times shortened for the fourth consecutive month.
The improvement in delivery times was linked to prompt payments, smoother traffic conditions, and suppliers’ willingness to respond more quickly to requests. However, despite the increase in new orders, businesses reported operating at full capacity and reducing outstanding business for the third consecutive month, with the rate of depletion reaching its highest level since January. Employment growth slowed to its weakest pace in three months, although firms continued to create jobs.
Key points
- Selling price inflation in Nigeria reached a four-month high in October 2026 due to increased fuel and transportation costs.
- Business conditions in Nigeria remained in expansion territory, supported by increases in output and new orders.
- Firms continued to experience higher costs for fuel, building materials, and food products, leading to increased selling prices.
