Report: Nigeria’s business domain dips amid power crisis, insecurity

Nigeria’s business environment experienced a slight moderation in momentum in May 2025, as the NESG–Stanbic IBTC Business Confidence Monitor (BCM) revealed a dip in the Current Business Index to +9.78 from +12.29 in April. The index measures the overall health of business sentiment across key sectors. “The business environment remains positive, but the pace of growth has slowed,” the NESG report noted, attributing the drag to persistent power supply issues, rising operational costs, and worsening insecurity. While the Non-Manufacturing (+22.19) and Manufacturing (+14.43) sectors posted strong performances, the Agriculture sector lagged behind with a negative index of -1.77. Agriculture Hit Hardest as Attacks, Climate Change Disrupt Farms “Daily attacks on farms, theft of livestock, and destruction of crops by armed groups and roaming herders have severely disrupted operations,” the report stated. Crop Production was particularly hard-hit, with a sub-index of -4.88, overshadowing modest gains in Livestock (+7.81) and Agro-Allied (+6.30). In the Manufacturing sector, Food, Beverages and Tobacco, Textiles, Chemicals, and Plastics led the charge. Yet, the sector remains mired in challenges, especially frequent power outages that force businesses to rely on expensive diesel generators. “High electricity tariffs and unreliable supply make it increasingly unsustainable for energy-intensive firms,” the report added. Non-manufacturing industries, buoyed by public infrastructure projects and stable Naira exchange rates, reported a positive index but noted that multiple taxes, high operational costs, and volatile macroeconomic conditions threaten to erode progress. “Without addressing these structural constraints, the sector’s positive trajectory may prove difficult to sustain,” the NESG warned. The Services sector also maintained a positive—though weaker—performance at +4.49, driven by financial institutions and professional services. However, it too grappled with rising operational costs and insecurity, particularly in northern and rural areas. Call for govt intervention Across all sectors, key constraints included inadequate access to financing, unpredictable government policies, and security challenges that disrupted supply chains and dampened investor confidence. “Nigeria’s business community urgently needs targeted government interventions, especially in power supply, security, and financing,” the report concluded. Looking ahead, business optimism for the next quarter improved modestly to +32.44, driven by confidence in Manufacturing (+56.38) and Trade (+63.91). But analysts warn that inflation, high interest rates, and weak consumer purchasing power could dampen the pace of recovery.