The Central Bank of Nigeria has cautioned that increasing costs for essential materials are impacting various sectors.
The Central Bank of Nigeria has cautioned that increasing costs for essential materials are impacting various sectors.
The Central Bank of Nigeria has issued a warning regarding the potential rise in consumer price inflation due to increasing input costs in vital sectors. This comes as businesses are currently managing these cost pressures, which might not be sustainable for much longer.
This information was shared in the Purchasing Managers’ Index report for June 2025, published by the central bank.
The report highlights that during the evaluated period, the indices for input prices in the aggregate economy, along with those in the Industry, Services, and Agriculture sectors, surpassed their respective output price indices.
According to the CBN, this trend indicates growing pressure on company profit margins, as businesses have been absorbing these costs instead of passing them on to customers.
“The widening difference between rising input costs and output prices creates pressure on profit margins. For companies, absorbing these costs may not be sustainable over time, potentially leading to future consumer price inflation,” stated the report.
It was noted that the agriculture sector experienced the greatest cost absorption index at 9.8 points in June, reflecting the largest disparity between input and output prices.
Meanwhile, the Services sector had the smallest gap, recorded at 4.4 points. Nonetheless, all three core sectors—industry, services, and agriculture—showed growth in business activity for the month. The composite PMI registered at 52.3 index points in June 2025, which indicates that economic activity has expanded for the sixth month in a row.
Of the 36 subsectors analyzed throughout the country, 25 experienced growth during this time, suggesting a broad economic momentum.
In the industry sector, a PMI of 51.4 index points was noted, marking its sixth month of growth. This positive trend was primarily due to increased production levels, with nine out of the 17 industrial subsectors achieving growth.
The Services sector achieved a PMI of 51.3 points, with 11 of the 14 subsectors reporting heightened activity during this period.
The CBN explained that the increase in services was due to heightened business activity across various subsectors. Leading the growth overall, the agriculture sector recorded a PMI of 55.2 index points, which was the highest among the three sectors.
This sector also marked its eleventh month of continuous growth, mainly supported by increased farming activities. All five subsectors within agriculture showed growth in June.
