Nigeria’s Economic Growth Slows in July 2025 as Manufacturing Suffers Historic Decline

Nigeria’s economic growth lost significant momentum in July 2025, with the manufacturing sector experiencing its steepest contraction on record. This was disclosed in the latest Business Confidence Monitor (BCM) jointly released by the Nigerian Economic Summit Group (NESG) and Stanbic IBTC Bank. Although the broader business index showed expansion for the seventh straight month, the Current Business Index dropped to 105.4 points from 113.6 in June, highlighting a concerning slowdown in economic activity.

The NESG and Stanbic report attributes the decline to several persistent challenges, including high interest rates, widespread insecurity, and unreliable electricity supply. These factors have drastically weakened business operations, profitability, and access to financing. In particular, manufacturers bore the brunt of the downturn, recording a contraction to 98.0 points—the sector’s worst performance since the BCM survey began.

While other sectors like agriculture (107.0), trade (103.2), and services (101.9) still showed some level of growth, their pace also slowed compared to the previous month. The report detailed a broad-based weakening in business indicators such as export and supply orders, pricing, and employment. Across the board, businesses cited financing constraints, poor infrastructure, inconsistent policies, and high rental costs as major impediments.

Stanbic IBTC further revealed that 14 of the economy’s core business indicators experienced month-on-month declines. Notably, trade stockpiling plummeted by 44% in July following a 31% rise in June. Other crucial areas like production, demand, and financial performance also saw declines of at least 18%, while the prices sub-index surged to 93 points—up from 70.7 in June—indicating intensifying cost pressures.

Despite a slight ease in the overall cost of doing business index to 123.2 points, input prices remain elevated. Stanbic IBTC forecasts further inflationary strain in the coming months, driven by seasonal flooding in the south and food shortages in the north. However, it projects a potential inflation drop below 20% by October, reaching as low as 17% by November 2025, depending on macroeconomic adjustments.

Source: The sun