The Nigeria Economic Summit Group in partnership with Stanbic IBTC has listed high inflation, rising interest rates, and the instability of the Naira in the foreign exchange market as contributors to challenges faced by businesses in Nigeria.
The NESG-Stanbic IBTC Business Confidence Monitor for October revealed 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, which is 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 are driving up operational costs, discouraging investment, and weakening demand across various sectors.
It also emphasized that Naira instability is raising import costs and complicating financial planning for businesses.
Additionally, low export performance is negatively impacting 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 financial planning for businesses.
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. 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.
“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 major food-producing states, compounded by prolonged rainfall in Q4 2024, caused widespread damage to farmland, crops, yields, and grazing areas.
