Yemisi Izuora
Nigeria’s business environment recorded a positive performance in April 2025, sustaining the favorable momentum observed since the beginning of the year. The NESG-Stanbic IBTC Business Confidence Monitor (BCM) showed an increase in the Current Business Index to +12.29 in April 2025 from +6.58 in March 2025.
This performance is driven by improvement in business conditions and the uptick in business activities.
A sub-sectoral analysis indicated weakly positive outcomes across all economic sectors included in the index. Notable strong performances were recorded in Trade (+25.12) and Non-manufacturing (+23.59), followed by Manufacturing (+8.78), Agriculture (+7.02), and Services (+6.54).
While all sectors improved relative to their March 2025 performance, the Trade sector recorded the most significant leap, from +0.51 in March to +25.12 in April. The rise coincided with two major festivals that typically drive higher spending on food, clothing, and household goods.
Despite the generally positive trend, structural challenges continued to dampen overall business growth.
The general business situation remained positive, with improvements in production levels, operating profits, cash flow, and employment. However, the cost of doing business slightly worsened, rising to +51.79 in April from +48.44 in March 2025. The most significant negative indicators were reduced investment (-15.00) and declining price levels (-16.62). These factors, combined with other weak business conditions, collectively slowed business activity and growth in April 2025.
Persistent power shortages, high commercial lease/rental property costs, limited access to financing, inadequate foreign exchange availability, and unclear economic policies emerged as key constraints to business expansion. High commercial lease/rental property costs remained a notable challenge for the second consecutive month, highlighting their disruptive effect on business operations. Similarly, restricted access to financing continued as a structural barrier, further limiting business growth throughout the month.
The current business conditions amongst Nigerian businesses improved further to their highest level since we began coverage of the Business Confidence Monitor (BCM) over seven months ago.
This is as business activity improved across all the sectors covered by the survey, with Agriculture returning to positive in April from a negative index in March.
The notable recovery in Agriculture at the start of Q2:25 reflects off-season harvest in the Northern region of the country, which ensured there were strong gains in crop production and Agro-allied activities during the month. Another significant improvement indicated by the survey was in the Trade sector, coinciding with the festivities witnessed in the month, which drove higher consumer spending on household goods, food, and clothing. Overall, production level, demand condition, financial performance and employment levels improved in April relative to March, while cost pressures remained, and there was a dip in the investment index.
Meanwhile, businesses remain cautiously optimistic regarding an improvement in the business environment over the next one to three months, although the Trade sector witnessed the highest level of optimism in near-term business prospects. Nigeria’s business conditions started Q2:25 on a positive note, and we expect this trend to be maintained, albeit relatively slower than witnessed in Q1:25. This is as the local currency is expected to depreciate in Q2:25 compared to Q1:25 amid the lingering global uncertainties.
This could also lead to a slightly higher inflation rate than seen in Q1:25, but it is still expected to remain softer compared to the 2024 average. Nonetheless, interest rates are likely to be lower this year amid moderate inflationary pressures, thereby helping to support economic growth over the medium term. On balance, we still maintain our expectation that the Nigerian economy is likely to grow by 3.5% y/y in real terms in 2025 relative to 3.4% y/y growth in 2024.