Business confidence rises for the sixth time, yet cost remains high

Business confidence has grown for the sixth consecutive month in 2025 on tamer inflationary pressures even as firms continue to grapple with high cost of doing business, according to NESG-Stanbic IBTC Business Confidence Monitor (BCM).

The Current Business Index rose to 113.6 points in June, up from 109.8 points in May 2025 as overall business conditions continue to improve on easing macroeconomic fundamentals.

“Businesses in Nigeria maintained a positive performance streak for another month, as the BCM Index stayed in the expansion region for the sixth consecutive month in 2025,” the report stated.

“This performance is attributed to several tailwinds, including easing inflationary pressures, improved investor confidence and climate, and stronger business resilience across key sectors.”

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The Nigerian economy is in its recovery phase after two turbulent years that sent inflation up the roof and plummeted the naira, two conditions that have left businesses gasping as their profitability takes a hit.

But businesses are heaving a sigh of relief with inflation cooling for two straight months and the naira maintaining stability despite global tensions.

Cost of doing business remains high

Despite the positive trends, the cost of doing business rose in June, according to the report. Firms grapple with limited access to financing, persistent electricity supply shortages, inconsistent economic policies, inadequate foreign exchange availability, and elevated commercial lease and rental costs.

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According to the report, strong business growth was observed in manufacturing at 123.6 points, non-manufacturing (120.7), and trade (121.0) in June 2025.

Agriculture sector also witnessed a rebound from its temporary contraction in May 2025, returning to the expansion region. The sector index rose to 108.9 points in the month, up from 98.2 points in May.

This recovery was primarily driven by a swift rebound in the Crop Production sub-sector, which contributed over 80 percent of total output.

However, non-manufacturing’s performance declined when compared with its May 2025 level of 122.2.

“This decline is linked to factors such as credit squeeze, rising inventories due to weak demand, and high (weak) exchange rates, which fuel imported inflation and escalate production costs, especially as many companies in this sector depend on imported inputs.”