Kenya has displaced Nigeria as Africa’s fastest-growing private-sector economy, according to new data from S&P Global, which showed that business conditions in the East African nation strengthened far more rapidly in November than in West Africa’s largest market.
The development marks the first clear shift in regional momentum this year and raises questions about the durability of Nigeria’s recovery as it heads into 2026.
According to the latest Purchasing Managers’ Index (PMI) surveys, Kenya’s surge to 55.0 in November is its highest reading in five years, surpassing Nigeria, which recorded a PMI of 53.6, and Uganda, which posted a PMI of 53.8.
A reading above 50 signals an improvement in private-sector conditions, while figures below the threshold indicate deterioration.
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Economists say the new rankings should serve as a wake-up call for Nigerian policymakers, given the country’s long-held status as a bellwether for non-oil private-sector performance on the continent.
While Nigeria remains firmly in growth territory, the pace of expansion among its regional peers suggests increasing competition for investment, market share, and supply-chain positioning.
Nigeria’s November reading reflects a continuation of the steady, if fragile, recovery that began in the second half of 2024. Firms reported increased output, improved business sentiment, and a modest rise in new orders, particularly in services, food processing, and consumer goods.
But the expansion was not strong enough to match the sharper upturns recorded elsewhere on the continent. The PMI report identified persistent cost pressures, FX volatility, and high logistics expenses as factors that continue to cap Nigeria’s growth potential.
Companies’ input prices, especially for imported materials, fuel, and packaging, remained a major constraint. Although some firms increased staffing to meet rising workloads, employment growth slowed compared with earlier months, reflecting caution around long-term commitments amid unpredictable costs.
In contrast, firms in Kenya and Uganda benefited from softer price conditions, improved supplier delivery times, and a more stable cost environment, enabling them to accelerate output more rapidly.
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Kenya’s jump from 52.5 in October to 55.0 in November was one of the steepest monthly improvements on the continent, driven by a sharp rise in new business volumes and a wave of successful product launches. Firms also reported stronger purchasing power among consumers, supported by easing inflation and steadier currency trends.
Improved supplier performance meant Kenyan companies faced shorter delivery times, allowing them to scale up production and rebuild inventories. The broader strength of these indicators created a momentum Nigeria simply could not match in November.
Uganda, the region’s second-best performer, also posted solid growth, helped by consistent demand across services and agriculture.
Analysts say Kenya’s rise should be viewed not as a one-off development but as part of a broader competitive realignment across East Africa, where medium-sized economies have been quietly strengthening business conditions despite global economic pressures.
For Nigeria, the implication is twofold. First, the non-oil economy remains resilient — but not exceptional. Second, investors comparing African markets may increasingly see faster-expanding economies as more attractive destinations, especially for consumer-facing and export-oriented industries.
Nigeria still retains significant advantages: a large domestic market, an expanding services base, and strong long-term demand fundamentals. However, without decisive progress on FX market stability, inflation control, and logistics reforms, the country risks falling further behind peers whose reforms are proving more immediately effective.