Nigeria’s business sector sees uptick in January, indicating economic recovery

Nigerian businesses kicked off in the new year on a positive note, reporting enhanced performance in January 2025.

According to the latest report by the NESG/StanbicIBTC Business Confidence Monitor, the current Business Performance Index for January 2025 stands at +8.12, indicating a significant rise in business activities compared to +0.77 points in December 2024.

The report also reveals a moderately optimistic outlook for the next one to three months, with the Business Confidence Measure (BCM) recording a positive index of +31.96.

This optimism is driven by anticipated improvements in cash flow, overall business conditions, production levels, exports, and short-term investments, primarily fueled by the momentum of a new business year.

A sectoral breakdown of the report shows that manufacturing exhibits the highest optimism with an index of +57.31, while services posted a confidence level of +29.41.

The improved business performance and optimistic outlook suggest a potential uplift in the business environment, which could bode well for the Nigerian economy in the coming months.

Persecondnews recalls that In October 2024, business performance across most sectors in Nigeria was weak.

The NESG-Stanbic IBTC’s Current Business Performance Index recorded a net balance of -23.24, reflecting the overall economic inertia dominating the month.

Sub-sectoral analysis revealed in the Business Confidence Monitor (BCM) survey shows a negative business sentiment, with declines in agriculture (-30.47), manufacturing (-28.72), non-manufacturing (-28.16), and trade (-23.45) sectors.

The services sector also faced a negative business condition, marked by a net balance of -6.19.

According to the survey, 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. Additionally, the Central Bank of Nigeria’s (CBN) hike in the Monetary Policy Rate (MPR) has led to higher credit costs, further straining business operations.

“The energy sector’s unreliability, marked by frequent power shortages, forces many companies to rely on costly generators, with the recent surge in fuel prices placing considerable pressure on operational budgets, particularly for small and medium-sized enterprises (SMEs),” it revealed.”