A new report by the Nigeria Economic Summit Group, in partnership with Stanbic IBTC, highlights ongoing economic challenges faced by businesses in Nigeria, including high inflation, rising interest rates, and the instability of the Naira in the foreign exchange market.
The October NESG-Stanbic IBTC Business Confidence Monitor reveals that the business environment remains weak, with a bleak outlook for the future.
The report shows that business performance in October, at -23.24, was weaker than the previous month, with inadequate power supply, insecurity, and limited access to financing identified as the top barriers to growth.
The report noted that Nigeria’s business environment is grappling with significant challenges, primarily driven by persistent inflation, increasing costs and eroding purchasing power.
The report further identified major obstacles, including limited access to finance, high unemployment levels, and restricted cash flow.
These factors drive operational costs, discourage investment, and weaken demand across various sectors.
It also emphasized that Naira instability is raising import costs and complicating business financial planning.
Additionally, low export performance negatively impacts profitability, further straining companies’ ability to thrive in the challenging economic landscape.
The report also emphasized that Naira instability is raising import costs and complicating business financial planning.
Additionally, low export performance is negatively impacting profitability, further straining companies’ ability to thrive in the challenging economic landscape.
The report states, “The country’s business operating environment continues to face severe challenges, with several underlying economic issues intensifying. Inflation remains high, eroding purchasing power and raising operational costs. The Central Bank of Nigeria’s (CBN) hike in the Monetary Policy Rate (MPR) has also led to higher credit costs, further straining business operations.
“Moreover, the Naira instability has raised import costs and complicated financial planning, negatively impacting profitability and pricing strategies. Export performance has also been weak, with businesses reporting below normal export order books, resulting in an export index of -12.65.”
In October 2024, the NESG-Stanbic IBTC BCM index for the Agriculture sector showed a mildly negative performance of -30.47 points.
The report highlighted that persistent flooding in central food-producing states, compounded by prolonged rainfall in Q4 2024, caused widespread damage to farmland, crops, yields, and grazing areas.
