Kenya's private sector recorded its strongest expansion in five years in October 2026. With a PMI (Purchasing Managers' Index) of 55.0, Kenya tops the eight major African economies tracked by S&P Global, well ahead of Nigeria (53.6) and Uganda (53.8).
A surge of historic proportions
The acceleration is striking: Kenya's PMI stood at 52.5 in September 2026. The 2.5-point monthly jump reflects a convergence of favourable factors. New orders rose at a solid pace, driven by stronger household purchasing power, easing inflation and successful product launches across several sectors.
According to Christopher Legilisho, economist at Standard Bank, «inflation expectations are anchored» — a strong signal of macroeconomic credibility. Hiring is also at its most robust pace since 2023, with the labour market absorbing the jobs generated by the recovery. One caveat: margins remain under pressure from raw material costs and a tax environment businesses still view as burdensome.
Nigeria stays resilient, South Africa falls into contraction
Nigeria, the previous leader, falls to third place (53.6) while maintaining twelve consecutive months of expansion — a performance few African economies can match. Nigeria's headline inflation slowed to 16.02% in October from 18.02% the previous month, though business confidence hit its lowest level since May.
Africa PMI rankings (October 2026): Kenya 55.0 · Uganda 53.8 · Nigeria 53.6 · Zambia 51.3 · Egypt 51.1 · Mozambique 50.8 · Ghana 50.1 · South Africa 49.0 (the only country in contraction).
South Africa stands alone in the red at 49.0 — its sharpest decline in eight months — despite business confidence reaching a twelve-month high. The paradox is explained by persistent load-shedding and sluggish domestic demand.
Why it matters
For the Indian Ocean region, Kenya's results carry direct relevance. Nairobi is the natural gateway into East Africa for many businesses from Mauritius, Réunion and the Comoros. A rebound in Kenya's private sector stimulates trade flows, regional investment and the logistics corridors that serve the entire basin.
The World Bank projects sub-Saharan Africa's GDP growth at 3.8% in 2025 then an average of 4.4% for 2026-2027 — Kenya, with its record PMI, is helping pull that average higher.
Sources: S&P Global / Businessfront, Standard Bank Research, World Bank.