Uganda overtakes Nigeria to become Africa’s fastest growing private sector 

Uganda has emerged as Africa’s strongest performer in private sector activity at the start of the year, overtaking Nigeria after the West African giant slipped back into contraction. 

The latest Purchasing Managers’ Index (PMI) surveys compiled by S&P Global show a shifting economic landscape across the continent, with Uganda standing out for its resilience while several major economies lost momentum in January.

The surveys indicate that overall business activity softened in most of the reviewed African markets, reflecting a slowdown after the festive season. 

Seven of the eight economies tracked recorded weaker PMI readings compared with December, with South Africa being the sole exception. 

Nigeria, which had enjoyed 13 consecutive months of expansion, saw conditions deteriorate again as demand weakened and output slowed.

Elsewhere, Egypt and Ghana also experienced a decline in business conditions. Ghana, in particular, posted the poorest performance among the surveyed economies, as falling new orders and reduced activity weighed heavily on private sector confidence. 

These developments point to broader demand-side pressures affecting several parts of the continent at the beginning of the year.

In contrast, Uganda maintained its expansion streak, registering its 12th straight month of improving private sector conditions. 

Although the headline PMI eased to 52.6 in January from 54.0 in December, it remained firmly above the 50-mark that separates growth from contraction. 

This confirmed that while the pace of expansion slowed slightly, the underlying momentum remained intact.

Business output in Uganda continued to grow, supported by stronger customer demand, targeted marketing initiatives and sustained job creation. These factors also enabled firms to clear backlogs of work, reinforcing overall operational stability.

Other economies such as Zambia, Mozambique and South Africa recorded modest growth. 

For South Africa, the continent’s most industrialised economy, the latest data hinted at early signs of stabilisation as the private sector returned to expansion following a weak final quarter last year. According to economists, improved demand encouraged firms to increase purchasing and rebuild inventories, even as delivery delays persisted.

Together, the figures underline Uganda’s growing prominence as a private sector leader in Africa amid a more cautious regional outlook.