Why CBN reinstated publication of key economic reports

In a move to enhance transparency and provide accurate economic insights, the Central Bank of Nigeria (CBN) last week reinstated the publication of several key economic reports.

The initiative, announced in a statement by Hakama Sidi Ali, acting director of corporate communications at the CBN, underscores the Bank’s commitment to fostering greater accountability within the Nigerian economy.

“In our view, it is essential, given that the non-availability of these important publications has deprived stakeholders of adequate artillery to leverage for future personal and business strategies, analysts at Afrinvest Securities Limited said.

The reports being reintroduced include the Purchasing Managers’ Index (PMI), Business Expectation Survey (BES), Inflation Expectation Report, and other crucial macroeconomic indicators. These reports are designed to offer stakeholders timely and reliable information on the country’s economic performance, thereby supporting informed decision-making across various sectors.

According to the CBN, the reintroduction of these reports is part of an ongoing data enhancement initiative aimed at ensuring that the public, policymakers, and the business community have access to essential economic indicators. The PMI, which provides insights into the health of Nigeria’s manufacturing, services, and agricultural sectors, along with the business and household expectations reports, are critical tools for assessing the nation’s economic climate.

By making these reports available periodically on its website, the CBN aims to promote a more inclusive economic discourse. Economists, analysts, investors, and the general public are encouraged to utilise these resources to gain a comprehensive understanding of Nigeria’s economic dynamics.

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This initiative is expected to play a pivotal role in supporting economic growth and ensuring that all stakeholders are well-informed about the country’s economic trajectory.

The announcement was swiftly followed by the release of the July 2024 Purchasing Managers’ Index (PMI) report—the first since December 2020. The PMI serves as a leading economic indicator, providing insights into the economy’s short- to medium-term direction by compiling assessment scores from key economic sectors into a single index.

In Nigeria, the composite PMI is calculated from the performance of three key sectors: Industry, Services, and Agriculture. The PMI scores are derived from both quantitative and qualitative surveys conducted among a broad base of strategic players across these sectors. A PMI above 50 indicates economic expansion, while a score below 50 signals contraction.

In July, the composite PMI registered at 49.7 points, marking the 13th consecutive month of contraction, although it slightly improved from June’s 44.8 points. The subdued reading was primarily driven by weak performance in the agriculture (49.7 points) and industry (48.3 points) sectors. This decline in new orders and employment was largely expected, given the dual pressures of exchange rate instability and volatile energy prices over the past year, both of which are crucial to these sectors’ activities.

For the second month in a row, the services sector PMI was upbeat (albeit modest) registering a 50.3points print vs 50.1 points in June. However, key indicators within the sector exhibited mixed performance. While business activity and stock of raw materials inventory expanded, the level of new orders contracted during the review period. Notably, employment levels remained stagnant.

A closer look at the sectoral composition reveals a mixed performance, with eight of the fourteen subsectors growing and six contracting. The motion pictures and music production subsector led with the highest expansion to 58.2 points (previously: 51.0 points), while the management of companies subsector saw the largest decline to 42.3 points (previously: 49.3 points).