Business confidence on its six-month high as real sector leads recovery
As Nigeria’s economy progressively recovers from the shocks of the economic reforms by President Bola Tinubu, barring any major disruptions, the Gross Domestic Product (GDP) is estimated to hit $450 billion by year’s end.
This was made known by the Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, yesterday.
Meanwhile, the country’s Business Performance Index maintained a positive momentum for the first half of this year, reflecting sustained resilience and cautious optimism among businesses.
In a statement made available to The Guardian, he noted that according to the newly rebased figures, Nigeria’s nominal GDP was reported at ₦372.82 trillion as of 2024, representing a 41 per cent increase over the 2019 nominal GDP, with the economy recording a growth rate of 3.38 per cent in 2024.
In Q1 2025, GDP growth moderated slightly to 3.13 per cent, with total output for the quarter at N94 trillion. This, he said, brings Nigeria’s cumulative GDP at the end of Q1 to approximately N466 trillion (or $300 billion).
He added that economic activities in Q1 this year were typically subdued, compared to the other quarters, which may account for the observed moderation in the Q1 GDP growth.
Breaking it down by sector, he said the latest GDP numbers highlight the need to strengthen productivity in critical sectors such as agriculture, manufacturing and trade.
These sectors, he said, are essential for economic inclusion, job creation, self-reliance, economic security and diversification.
“However, their growth rates remain below expectations: agriculture grew by only 0.7 per cent and manufacturing by 1.7 per cent in Q1. These sectors require targeted interventions to unlock their full potential and drive sustainable development,” he said.
Yusuf noted that a review of sectoral performance in Q1 shows that 37 sectors recorded growth (with most, however, slowing down); nine sectors contracted, while three sectors entered recession.
Top-performing sectors included financial services (15.3 per cent); oil refining (11.51 per cent); transportation (14.08 per cent); ICT (7.4 per cent), and metal ores (25 per cent). The following sectors contracted: livestock (-16.7 per cent); fishing (-0.21 per cent); Textiles (-1.63 per cent); coal mining (-22.3 per cent); quarry and minerals (-21.55 per cent); plastics and rubber (-3.2 per cent); iron and steel (-0.35 per cent); air transport (-0.81 per cent).
Sectors in recession include air transport, textiles and coal mining. This follows their consistent contraction over the past few quarters.
He further listed major contributors to the country’s GDP to include trade, crop production, real estate, ICT, construction, petroleum and gas, food and beverage, financial institutions, and manufacturing.
Relatedly, according to the June 2025 edition of the NESG-Stanbic IBTC Business Confidence Monitor (BCM) report released last month, the Current Business Performance Index for June rose to 113.6 points, an improvement from 109.8 points in May.
This shows continued expansion, with the index consistently staying above the 100-point threshold that separates growth from contraction.
The Business Confidence Measure, which captures business sentiment regarding future performance, surged to 134.5 points in June, its highest level so far this year.
Despite these positive indicators, limited access to finance was reported as the most pressing constraint for businesses in June. Other challenges include inadequate power supply, FX volatility, unclear economic policies, and high commercial lease and property rental costs.
Among all sectors, manufacturing emerged as the top performer, with the sector index climbing to 123.6 points in June, up from 114.4 points in May.
This jump reflects solid growth in key sub-sectors including cement, plastic and rubber products, wood and wood products and pulp, paper and paper products.
These industries were instrumental in driving the expansion, with firms reporting increased production volumes and stronger supply chain performance.
However, manufacturers continue to grapple with significant structural hurdles. The report cited raw material shortages, unstable electricity supply, high import tariffs and escalating inflation as major threats. Rising diesel costs, coupled with a depreciating naira, have further increased input costs. Other impediments include multiple taxation, poor access to credit, insecurity, and uncertain regulatory policies.
The non-manufacturing sector posted a still-positive index of 120.7 points in June 2025, but this represented the second consecutive monthly decline, from 122.2 in May and 123.6 in April.
The downward trend demonstrates increasing concerns among service-based industries about the macroeconomic environment. High operational costs, driven by soaring energy prices, dilapidated infrastructure, and rising transportation expenses, are impacting efficiency and eroding business margins, the report noted.
The report also noted difficulties accessing finance and the negative impact of foreign exchange instability on planning and procurement.
While most sub-sectors posted growth, some, particularly Motor Vehicle and Assembly, recorded noticeable declines. Still, the overall gains in leading sub-sectors outweighed these losses, reinforcing the sector’s upward trajectory.
