The NESG-Stanbic IBTC Business Confidence Monitor for February 2025 reported enhanced business activities in Nigeria’s trade and manufacturing sectors, illustrated by a Current Business Index rise to +11.50. While trade surged at +21.48, and manufacturing at +10.35, challenges persist, notably a high exchange rate and deteriorating investment sentiment.
In February 2025, the trade and manufacturing sectors of Nigeria exhibited significant growth, leading to a positive shift in business activities for the second consecutive month. This development was documented in the NESG-Stanbic IBTC Business Confidence Monitor, a key survey conducted by the Nigerian Economic Summit Group with the support of Stanbic IBTC. The report revealed that the Current Business Index rose to +11.50 from +5.69 in January, indicating an overall enhancement in business conditions across crucial sectors.
The trade sector was a major contributor to this growth, achieving an impressive increase of +21.48. The manufacturing sector followed closely with a rise of +10.35, alongside non-manufacturing (+10.21), services (+7.15), and agriculture (+2.69). Despite advancements in many sectors relative to January, the agricultural sector noted a slowdown, reflecting persistent challenges in that domain.
Improvements in Nigeria’s business environment were noted, although concerns regarding the high exchange rate persisted, significantly impacting operational costs and consumer pricing. The cost of doing business index remained high at +47.18, a slight decrease from January, yet it continued to burden enterprises.
Access to credit experienced a downturn to +24.84 due to unfavorable macroeconomic conditions and diminished commercial activity, constraining both current performance and growth prospects for many businesses. Despite some encouraging indicators, there was a sharp decline in business investment, recorded at -39.50, indicating investor caution.
Furthermore, a drop in price levels at -23.78 exacerbated the sluggish business activity and demand, signalling that consumer purchasing power is under considerable strain. Multiple persistent challenges, including limited foreign exchange availability, ongoing power shortages, ambiguous economic policies, restricted finance access, and high lease costs, collectively impeded growth and profitability.
The report emphasized that the elevated exchange rate against major currencies remains a critical issue. Rising import costs undermine profitability and hamper effective pricing strategies, while limited financing access continues to pose a structural barrier to business development.
In conclusion, the February 2025 report highlights notable advancements in Nigeria’s trade and manufacturing sectors, contributing to improved business activities. Despite significant gains, challenges such as a high exchange rate, limited access to credit, and ongoing operational barriers remain critical concerns that may hinder future business expansion and profitability. Investment sentiment continues to be dampened by the various economic pressures, underscoring the need for strategic interventions to stabilize the business environment.
Original Source: businessday.ng
