Nigerian businesses demonstrated modest resilience in August 2025, with the NESG-Stanbic IBTC business performance index climbing to 107.3 points. This represents a 1.9-point increase from July’s performance, indicating gradual economic recovery despite persistent structural challenges.
The report, aptly titled “Mixed Signals: Strong Sectoral Growth Versus Structural Hurdles,” captures the complex dynamics facing Nigeria’s business landscape. While the upward trajectory suggests improving business conditions, underlying constraints continue to hamper optimal growth potential.
Financing Access Remains Top Business Challenge
Limited access to financing emerged as the most significant barrier to business expansion for the second consecutive month. This persistent challenge underscores the critical need for improved financial infrastructure and lending mechanisms to support enterprise growth.
Beyond financing constraints, businesses grapple with unclear economic policies, inadequate power supply, high commercial lease costs, and security concerns. These interconnected challenges create a complex operating environment that requires comprehensive policy interventions.
Sectoral Performance Shows Mixed Results
The trade sector recorded the strongest rebound after experiencing a decline in July, leading the sectoral recovery with impressive momentum. Manufacturing (106.2 points), Non-manufacturing (116.2 points), Trade (114.1 points), and Services (103.7 points) all registered positive growth compared to July performance.
However, agriculture contracted to 95.6 points, dragged down by challenges in crop production and forestry operations. The agricultural decline stems from delayed rainfall patterns, shorter wet seasons, persistent insecurity, and significant disruptions to crop planting schedules.
Agricultural Sector Faces Climate and Security Pressures
While crop production struggled, livestock and agro-allied sub-sectors showed modest improvements compared to July figures. This mixed agricultural performance reflects the sector’s vulnerability to both climate variability and security challenges affecting rural farming communities.
The agricultural contraction highlights Nigeria’s ongoing food security concerns and the urgent need for climate-resilient farming practices. Addressing these challenges remains crucial for overall economic stability and growth sustainability.
Outlook
Despite current challenges, business optimism remains anchored on several positive factors, including seasonal economic activity and ongoing policy adjustments. Exchange rate stability, infrastructure spending initiatives, and gradual consumer demand recovery provide additional support for future growth prospects.
The NESG-Stanbic IBTC analysis suggests that while immediate challenges persist, the foundation for sustained business performance improvement remains intact across key economic sectors.