Ongoing business recovery sets stage for improved business performance in 2025 – Report
Orisemeke Benjamin
Despite a weak recovery in January 2025, Nigeria’s business environment began the year on a positive note.
The NESG-Stanbic IBTC Business Confidence Monitor’s (BCM) Current Business Index rose to +5.69 from +0.77 in December 2024, reflecting an uptick in commercial activity typical of this period.
A sub-sectoral analysis revealed broadly subdued outcomes, with negative performances in non-manufacturing (-4.64), Services (-1.40), Trade (-0.84), and Manufacturing (-0.66).
However, these sectors showed relative improvement compared to December 2024. In contrast, Agriculture recorded a weakly positive performance at +10.86.
Structural challenges in Nigeria’s business environment eased slightly, supporting the improved business performance observed during the month.
Exchange rate stability and moderated price increases led to a slower rise in operational costs and consumer prices.
The cost of doing business index declined to +47.58 from +50.32 in December, signaling reduced pressure on business growth.
Access to credit improved slightly (+31.98) due to increased commercial activity at the start of the financial year. However, high financing costs remained a critical constraint on both current performance and future growth expectations.
The most significant negative impacts were reduced investment (-27.50) and declining price levels (-26.62), which severely dampened overall business activity and demand.
Frequent power shortages alongside limited foreign exchange availability, and restricted access to finance emerged as the most pressing challenges in January, constraining business expansion. These factors contributed to only weakly positive results in the general business situation (+44.82) and production levels (+23.74).
A key concern remains the high exchange rate of the local currency against major trading currencies, which, alongside rising import costs, continues to erode profitability and disrupt pricing strategies. Limited access to financing persisted as a major structural barrier, further hindering business growth throughout the month.
