The Nigerian Economic Summit Group (NESG) has said the most significant negative impacts on Nigerian businesses in February 2025, were reduced investment to the tune of 39.50%, and declining price levels of 23.78%, severely dampening business activity and demand.
The update was given in the NESG-Stanbic IBTC’s Business Confidence Monitor for March 2025.
According to the report, limited foreign exchange availability, persistent power shortages, unclear economic policies, restricted access to finance, and high commercial lease costs emerged as the most pressing challenges in February, hindering business expansion.
“A primary concern remains the elevated exchange rate of the local currency against major trading currencies, which, alongside rising import costs, continues to erode profitability and disrupt pricing strategies. Limited financing access persisted as a structural barrier, further restricting business growth throughout the month,” the report said partly.
Despite the challenges, the report said maintaining the positive momentum from the start of the year, Nigeria’s business environment showed stronger performance in February 2025.
The NESG-Stanbic IBTC Business Confidence Monitor (BCM) recorded a rise in the Current Business Index to +11.50, up from +5.69 in January 2025, signalling a sustained improvement in business activities.
A sub-sectoral analysis revealed a generally weak business performance despite positive trends in Trade (+21.48), Manufacturing (+10.35), Non-Manufacturing (+10.21), Services (+7.15), and Agriculture (+2.69).
However, most sectors experienced relative improvements compared to January, except Agriculture, which saw a slowdown.
Structural challenges in Nigeria’s business environment eased slightly, supporting the observed improvements.
The overall business climate strengthened, but a higher exchange rate remained a key driver of operational costs and consumer prices.
The cost of doing business index remained elevated at +47.18, though slightly lower than in January 2025.
Access to credit also deteriorated (+24.84) due to unfavourable macroeconomic conditions and reduced commercial activity.
Again, high financing costs continued to constrain both current business performance and future growth expectations.
