The trade and manufacturing sectors in Nigeria’s February 2025 report indicate improved business activities with the Current Business Index rising to +11.50. Notable gains were reported in trade and manufacturing, although agriculture faced slowdowns. Challenges like high exchange rates, financing constraints, and operational costs persisted, affecting profitability and investment.
In February 2025, Nigeria’s trade and manufacturing sectors significantly enhanced business activities for the second consecutive month, indicating favorable conditions as per the NESG-Stanbic IBTC Business Confidence Monitor. The Current Business Index rose to +11.50 from +5.69 in January, showcasing sustained improvement in various sectors, particularly trade and manufacturing.
The report highlights impressive gains in the trade sector, which increased by +21.48, followed by manufacturing at +10.35, non-manufacturing at +10.21, services at +7.15, and agriculture at +2.69. Although most sectors showed progress relative to January, agriculture faced a slowdown, reflecting the ongoing challenges this sector experiences.
The NESG report indicated that structural difficulties in Nigeria’s business environment have slightly abated, albeit the elevated exchange rate remains a significant concern, inflating operational costs and consumer prices. The cost of doing business index stood at +47.18, slightly improving from January but still burdensome for companies.
Access to credit has worsened to +24.84, largely due to unfavorable macroeconomic conditions and declining commercial activity. High financing costs continue to limit both current performance and future growth expectations, restricting expansion for many businesses.
Despite positive indicators, business investments have sharply declined by -39.50, reflecting a cautious investor sentiment. Additionally, declining price levels (-23.78) negatively impacted business activity and demand, indicating pressure on consumer purchasing power.
Key challenges endured in February include limited foreign exchange availability, persistent power shortages, unclear economic policies, restricted access to finance, and high commercial lease costs, all of which impede business growth and profitability. Notably, the elevated exchange rate against major global currencies remains a pressing issue for operators in the market.
Rising import costs continue to undermine profitability and complicate pricing strategies, while constrained access to financing acts as a structural barrier to growth across the sector throughout the month.
In summary, despite the trade and manufacturing sectors enhancing business conditions in February 2025, numerous challenges remain persistent. Key issues such as the elevated exchange rate, limited access to finance, and high operational costs continue to restrain growth potential and impact investor sentiment. Addressing these hurdles will be essential for sustaining the positive momentum observed in business activities.
Original Source: businessday.ng
