Persistent power supply shortages major constraints to businesses

Orisemeke Benjamin

Businesses in Nigeria maintained a positive performance streak for the fifth consecutive month in 2025, as current Business Performance Index for May 2025 stands at +9.78, signaling mildly positive business activity, though slightly lower than the +12.29 recorded in April 2025.

The Business Confidence Monitor (BCM) is the flagship survey-based report of the Nigerian Economic Summit Group (NESG), supported by Stanbic IBTC.

According to the report, key business challenges ranking has been largely unchanged over the past three months with persistent power supply shortages the most significant constraint on business growth.

“Key constraints to business expansion in May 2025 included persistent power supply shortages, limited access to financing, high commercial lease and rental costs, inadequate foreign exchange availability, inconsistent economic policies, and worsening insecurity. In particular, the resurgence of security challenges posed severe disruptions to business operations. Similarly, restricted access to finance has remained a structural bottleneck, further dampening business prospects,” the report said.

Sectoral analysis revealed mildly positive outcomes across most sectors, except for Agriculture, which recorded a negative performance with strong performances noted in Non-manufacturing (+22.19), followed by Manufacturing (+14.43), Trade (+14.13), and Services (+4.49).

In contrast, Agriculture posted a negative index of -1.77, primarily driven by existing structural issues and amplified by the intensified impacts of climate change, including prolonged droughts, erratic rainfall, extreme heat waves, and shorter wet seasons.

The report noted that “Compared to April 2025, all sectors experienced a slowdown in performance, except Manufacturing, which remained resilient.

“Most BCM sub-indices showed lower values compared to the previous month. The general business situation remained positive, with reported improvements in production levels, operating profits, cash flow, and employment. However, the cost of doing business declined to +38.54 in May from +51.79 in April.

“Notably, the most significant negative indicators were a sharp reduction in investment confidence (-25.61) and declining price levels (-18.15), contributing to slower business activity and growth during the month.”