Nigeria’s business confidence hits new high in June 2025, amid structural warnings

Nigeria’s business landscape continued its positive momentum in June 2025, as the country’s Business Performance Index marked its sixth consecutive month of expansion, underscoring growing resilience and cautious optimism among enterprises.

This was revealed in the latest edition of the NESG-Stanbic IBTC Business Confidence Monitor (BCM) report released in July.

According to the report, the Current Business Performance Index rose to 113.6 points in June, improving from 109.8 points in May.

This reflects continued business expansion, with the index consistently staying above the 100-point benchmark that separates growth from contraction.

More notably, the Business Confidence Measure—which gauges firms’ expectations about future performance—surged to 134.5 points in June, the highest recorded so far in 2025, signaling robust optimism about the months ahead.

Despite the encouraging figures, the report flagged significant challenges hampering business operations. Limited access to finance remained the top constraint, followed by inadequate power supply, foreign exchange volatility, unclear economic policies, and high commercial lease and property costs.

Among all sectors, manufacturing stood out as the best-performing industry, with its sector index rising sharply to 123.6 points in June, from 114.4 in May.

This growth was largely driven by strong performances in sub-sectors such as Textile, Apparel & Footwear; Cement; Plastic and Rubber Products; Wood and Wood Products; and Pulp, Paper and Paper Products.

These sub-sectors reported higher production volumes and improved supply chain efficiency. However, manufacturers are still grappling with critical structural bottlenecks, including shortages of raw materials, unstable electricity supply, high import tariffs, and rising inflation.

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Additional burdens such as escalating diesel prices, a depreciating naira, multiple taxation, poor access to credit, insecurity, and regulatory uncertainty have further complicated the operating environment.

In response to these pressures, the Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria (CBN) to cut interest rates in a bid to stimulate growth in the real sector.

This appeal comes in the wake of the CBN’s Monetary Policy Committee (MPC) decision during its 301st meeting held on July 21–22, where it resolved to retain the Monetary Policy Rate (MPR) at 27.5%.

“The expectation of MAN is to have a rate cut supported by a robust fiscal policy framework capable of facilitating improved access to long-term loans, enhanced productivity, and sustained economic growth,” the association said in a statement.

Meanwhile, the non-manufacturing sector also showed resilience with a still-positive index of 120.7 points in June. However, this figure marked a second consecutive monthly decline, down from 122.2 in May and 123.6 in April, pointing to growing uncertainty among service-driven businesses.

Service providers cited rising operational costs, poor infrastructure, and transport expenses as major hurdles, along with access-to-finance challenges and foreign exchange volatility, which have affected long-term planning and procurement.

While the majority of non-manufacturing sub-sectors recorded growth, some—particularly the Motor Vehicle and Assembly category—saw declines. Nevertheless, the report concluded that the overall sector outlook remains positive, with leading sub-sectors continuing to drive momentum.

The BCM report also clarified its measurement methodology, stating that index scores above 100 indicate “Expansion” or “Optimism”, while scores below 100 reflect “Contraction” or “Pessimism.”