The trade and manufacturing sectors of Nigeria have indicated improved business activities in February 2025, according to the NESG-Stanbic IBTC Business Confidence Monitor. The Current Business Index rose significantly, with trade leading the gains. However, challenges such as high operating costs, limited credit access, and declining investments persist, hindering growth prospects.
The trade and manufacturing sectors of Nigeria demonstrated a positive impact on business activities for the second consecutive month in 2025, indicating favorable conditions according to the NESG-Stanbic IBTC Business Confidence Monitor. The report revealed that the Current Business Index increased from +5.69 in January to +11.50, reflecting a steady improvement across major sectors.
The trade sector reported the highest growth at +21.48, followed by manufacturing at +10.35, non-manufacturing at +10.21, services at +7.15, and agriculture at +2.69. Despite the overall positive trends, the agricultural sector faced challenges, leading to a slowdown in performance relative to other sectors.
The improvements in business conditions were attributed to easing structural difficulties in Nigeria’s economic landscape. However, challenges persist, particularly concerning the elevated exchange rate which continues to affect operational costs. The cost of doing business index remains high at +47.18, despite a slight decrease from the previous month.
Access to credit has worsened, with a reading of +24.84, a result of unfavorable macroeconomic conditions and declining commercial activity. This situation has negatively impacted both current business performance and expectations for future growth, restricting expansion opportunities for numerous enterprises.
The report highlighted a substantial decline in business investments by -39.50, indicating a cautious outlook among investors. Moreover, decreasing price levels at -23.78 have hindered business activity and consumer demand, emphasizing ongoing pressures on purchasing power.
Other challenges mentioned include limited access to foreign exchange, persistent power shortages, ambiguous economic policies, restricted financing, and high commercial lease costs, all of which collectively restrain business growth and profitability. The elevated exchange rate against global currencies remains a critical concern for local businesses, further exacerbating import costs and undermining profitability.
In summary, while the trade and manufacturing sectors in Nigeria have shown improved business activities in February 2025, several challenges continue to hamper further growth. High operational costs, declining access to credit, and limited investments indicate a cautious business environment. The elevated exchange rate and other macroeconomic hurdles remain pressing issues, necessitating targeted interventions to enhance overall business prospects.
Original Source: businessday.ng
