Nigeria’s Business Confidence Index Climbs to 107.3 Despite Financing and Structural Challenges

Nigeria’s business environment showed modest improvement in August 2025, with the Current Business Performance Index rising to 107.3 points, according to the latest NESG-Stanbic IBTC Business Confidence Monitor (BCM). This marks a 1.9-point increase from July’s figures, signaling steady resilience across several industries. However, structural constraints such as poor access to financing, weak infrastructure, and insecurity continue to weigh heavily on overall growth prospects.

The report, titled “Mixed Signals: Strong Sectoral Growth Versus Structural Hurdles,” highlighted strong rebounds in technology, finance, manufacturing, energy, and logistics. Trade recorded the most significant recovery after a dip in July, while both manufacturing and services also posted gains. Agriculture, however, slipped into contraction at 95.6 index points, dragged down by weaker crop production and forestry.

Sectoral data revealed that climate change effects—such as delayed rainfall and shorter wet seasons—alongside insecurity and disrupted planting cycles, severely hampered agricultural performance. While livestock, fishing, and agro-allied industries showed mild improvements, rising costs of fertiliser, poultry feed, and other inputs are squeezing margins for farmers and agribusiness operators. Many are struggling to reinvest or expand, with some facing closures.

Beyond agriculture, the BCM also pointed to worsening cost pressures for businesses. Rising input prices, high rental costs, and unreliable electricity supply continued to undermine profitability. Access to credit and exports also weakened compared to July, further exposing firms to cash flow challenges. The report stressed that these conditions are eroding consumer purchasing power, intensifying demand volatility, and creating uncertainty for investors.

Analysts warn that unless urgent measures are taken, the fragile business recovery could stall. The report calls for clear and stable economic policies, improved financing options for businesses, better infrastructure, and stronger security. With Nigeria’s GDP growth hovering around 2.54%, experts argue that addressing these bottlenecks is crucial for boosting investor confidence, supporting SMEs, and unlocking the full potential of the economy.

Source: Nairametrics