…five of eight major economies contract as inflation, external shocks bite
Africa’s private-sector recovery is showing signs of strain as the number of major economies reporting business contractions more than doubled in three months, raising concerns that inflation, rising fuel costs, and renewed geopolitical tensions are beginning to undermine the continent’s economic rebound.
BusinessDay’s analysis of the latest Purchasing Managers’ Index (PMI) reports from eight African economies showed that five economies recorded contractions in May, up from three in April and two in March. The trend points to a weakening business environment as companies grapple with rising operating costs, softer demand and growing uncertainty.
The deterioration comes despite strong performances in a handful of economies, particularly Nigeria and Uganda, which posted the highest PMI readings on the continent at 54.1.
A PMI reading above 50 indicates an improvement in business conditions, while a reading below 50 signals contraction. The index
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