Trade and Manufacturing Sector Enhance Business Activities in February 2025
In February 2025, Nigeria’s trade and manufacturing sectors improved business activities, as reported by the NESG-Stanbic IBTC Business Confidence Monitor. The Current Business Index increased, with the trade sector showing notable growth. However, challenges remain, including high operational costs, credit availability issues, and a decline in business investment.
In February 2025, Nigeria’s trade and manufacturing sectors positively influenced business activities for the second consecutive month, indicating favorable conditions. The information originates from the NESG-Stanbic IBTC Business Confidence Monitor (BCM), which is a comprehensive survey supported by the Nigerian Economic Summit Group (NESG) and Stanbic IBTC.
The report indicates that the Current Business Index rose to +11.50 from +5.69 in January, showcasing an improvement across essential sectors. The trade sector experienced the most significant increase at +21.48, followed by manufacturing at +10.35, non-manufacturing at +10.21, services at +7.15, and agriculture at +2.69. However, it notes a slowdown in the agricultural sector due to ongoing industry challenges.
Despite the overall sector improvements, structural difficulties in Nigeria’s business environment still exist. A high exchange rate significantly impacts operational costs and consumer prices, evidenced by the cost of doing business index remaining high at +47.18, though slightly reduced from January.
Credit access deteriorated further, reflected in the index at +24.84, due to adverse macroeconomic conditions and reduced commercial activity. This high financing cost has constrained both current business performance and future growth expectations.
Moreover, although there were some positive indicators, business investment sharply declined by -39.50, reflecting investors’ cautious sentiment. Declining price levels at -23.78 further dampened business activity and demand, indicating that consumer purchasing power remains under pressure.
The report highlights several ongoing challenges, including limited foreign exchange, persistent power shortages, unclear economic policies, restricted access to finance, and elevated commercial lease costs. These factors impede business expansion and profitability significantly. Additionally, businesses face a pressing issue with the elevated exchange rate of the local currency against major currencies, further compromising profitability and disrupting pricing strategies.
In summary, Nigeria’s trade and manufacturing sectors showed improvement in February 2025, as indicated by the rise in the Current Business Index. However, challenges such as high operational costs, deteriorating access to credit, and cautious investor sentiment persist, limiting business investment and growth opportunities. Ongoing structural issues, particularly the elevated exchange rate, continue to hinder profitability and economic stability.
Original Source: businessday.ng
