Nigeria’s Private Sector Sees Strongest Job Growth in Nearly Two Years

Nigeria’s private sector has posted its most significant expansion in employment in almost two years, signaling cautious optimism in the economy despite persistent challenges of inflation, high borrowing costs, and foreign exchange instability. The latest data released through business activity surveys and industry assessments revealed that hiring surged across multiple industries in August 2025, marking the strongest job creation in 23 months.

According to findings from the latest Purchasing Managers’ Index (PMI) compiled by market analysts, the employment index rose sharply as businesses responded to improved demand and expansion in output. Companies across manufacturing, services, agriculture, and construction reported increases in staff strength, reversing months of subdued hiring that had characterized much of 2024. This development reflects growing confidence that Nigeria’s economy may be stabilizing, even as policymakers continue efforts to curb inflation and strengthen fiscal stability.

Analysts attribute the rise in private sector job creation to several factors. First, renewed capital inflows into the banking and oil sectors have improved liquidity, spurring investments that filtered into the broader economy. Second, government reforms targeted at improving ease of doing business and clearing foreign exchange backlogs have boosted investor confidence, encouraging companies to scale up operations. Additionally, seasonal demand in agriculture and consumer-facing industries has created temporary but substantial hiring opportunities.

In the manufacturing sector, companies reported increased orders, driven in part by government procurement for infrastructure projects and private consumption ahead of the year-end festive season. While the sector still grapples with high energy costs and imported input prices, the marginal stability of the naira in the official market has eased some pressure. Many factories have resumed production shifts that were suspended earlier in the year, contributing to the surge in new jobs.

The services industry, particularly ICT, finance, and retail, also recorded significant gains. Tech startups, buoyed by new rounds of venture funding, are hiring software engineers, marketers, and customer service staff. Banks, which have faced regulatory tightening from the Central Bank of Nigeria (CBN), are expanding compliance and risk management teams to adapt to stricter liquidity rules. Retail chains and consumer goods distributors, meanwhile, added staff to handle increased customer volumes.

Agriculture, the country’s largest employer, reported notable seasonal recruitment. The planting and harvest cycles, particularly in the Middle Belt and northern regions, created strong demand for casual labour. Government intervention programs that provided subsidized inputs also spurred higher planting activity, resulting in job creation for farmhands, transporters, and processors. In the construction sector, ongoing road and housing projects spurred hiring of artisans, engineers, and support workers.

Despite the positive trend, business leaders remain cautious about the sustainability of this growth. Many firms highlighted that while hiring has picked up, rising inflation—currently hovering around 28 percent—continues to erode household incomes and consumer purchasing power. This raises concerns that demand could taper off in the coming months if inflation is not tamed. High interest rates, another persistent challenge, have also limited borrowing for expansion, meaning that only well-capitalized companies are able to increase employment on a meaningful scale.

Labour unions and workers’ representatives welcomed the report but urged the government to ensure that job growth translates into quality employment. They argued that much of the expansion is still concentrated in low-paying or temporary jobs, which may not significantly improve living standards. “The numbers are encouraging, but we must ask what kind of jobs are being created. Are they secure, decent jobs with benefits, or casual contracts that keep workers in poverty?” one union leader remarked.

The government, on its part, described the surge in employment as a sign that ongoing reforms are beginning to yield results. Officials from the Ministry of Labour and Employment said the administration’s policies on industrial expansion, support for SMEs, and agriculture modernization are helping to stimulate the private sector. They also reiterated commitments to vocational training and skill development programs to ensure that Nigeria’s workforce remains competitive in a rapidly changing job market.

Economists say sustaining this momentum will require continued macroeconomic stability, deeper structural reforms, and targeted policies to support sectors with high labour absorption capacity. They argue that Nigeria’s youthful population represents both a challenge and an opportunity, as millions enter the workforce each year. Without sustained private sector expansion, unemployment pressures could worsen, undermining social stability.

International observers also weighed in on the report, with some describing Nigeria’s employment growth as a positive signal for investors seeking opportunities in Africa’s largest economy. However, they noted that challenges around infrastructure, policy consistency, and insecurity still weigh heavily on the business climate. For instance, manufacturers in the northern region reported disruptions due to insecurity on transport routes, which added costs and slowed expansion plans.

Looking ahead, analysts suggest that the trajectory of job creation will depend on how effectively Nigeria manages inflation, stabilizes the naira, and maintains investor confidence. If these conditions are met, the private sector could continue to absorb more workers, reduce unemployment, and contribute to inclusive economic growth. Conversely, a relapse into volatility could slow the gains recorded in the past months.

For now, the news of the strongest job growth in nearly two years offers a glimmer of hope for millions of Nigerians seeking employment opportunities. It also signals that with the right policies, the private sector can remain the engine of economic expansion, even in the face of significant challenges. Whether this momentum will be sustained remains a critical question for policymakers, businesses, and workers alike.