Nigeria’s business activity expanded for the twelfth consecutive month in December 2025, although the pace of growth slowed amid rising costs and softer consumer demand.
This is according to the latest NESG–Stanbic IBTC Business Confidence Monitor (BCM) titled “Rising Uncertainty Dampens Nigeria’s Current Business Conditions”, released on Monday.
While overall business conditions remained firmly in expansionary territory, the report shows that structural bottlenecks, cost pressures, and weakening demand are beginning to temper confidence among businesses.
What the report is saying
According to the report, the Current Business Performance Index edged down to 112.0 points in December 2025 from 113.3 points in November, but remained 11.2 points higher than its December 2024 level.
“This broad-based moderation points to a more cautious business stance and subdued consumer demand,” the report noted.
All five major sectors—Agriculture, Manufacturing, Trade, Non-Manufacturing, and Services—remained in expansion during the month, although three experienced slower growth compared with November, the report noted.
Agriculture posted the strongest performance, with its BCM index climbing 9.6 points to 112.9, driven by heightened seasonal demand. Manufacturing also improved modestly to 117.9 points, while Trade (123.8), Non-Manufacturing (110.2), and Services (104.3) all recorded slower growth.
Key sub-indices—production, financial conditions, supply orders, credit access, and cash flow—moderately declined, reflecting rising business caution, while the cost of doing business increased to 61.6 points from 54.3 in November, highlighting persistent cost pressures.
Sectoral trends and underlying pressures
The report attributed Agriculture’s rebound to stronger activity in Crop Production, Livestock, and Agro-Allied sub-sectors, fueled by festive-season demand.
Livestock and Agro-Allied activities exited contraction territory, recording 105.2 points and 108.2 points, respectively.
According to the report, “Combined with good weather and improved harvests, improved access to inputs, growth in agro‑processing, supportive macroeconomic conditions, and increased mechanisation, strengthened overall business performance in the sector.”
Manufacturing activity also improved, supported by strong output in Food, Beverages and Tobacco; Textile and Apparel; Plastic and Rubber Products; and Electrical and Electronics.
However, structural challenges persist, as sub-sectors such as Cement, Basic Metal, Iron and Steel, and Wood Products slipped into contraction.
Surveyed firms cited unreliable electricity supply, insecurity, raw material shortages, rising input prices, and weakening sales as key constraints.
Non-Manufacturing, Services, and Trade sectors all lost momentum despite remaining in expansion.
In Trade, the BCM Index declined to 123.8 points from 132.9 points, as seasonal sales were offset by weak consumer purchasing power.
Services recorded its second consecutive slowdown, weighed down by weaker activity in Real Estate, Broadcasting, Telecommunications, and Professional Services. Persistent issues such as high operating costs, poor infrastructure, insecurity, and limited access to finance continue to constrain these sectors.
What this means
The December 2025 BCM data suggests that Nigeria’s economy remains resilient but increasingly cautious.
While expansion has been sustained for a full year, rising costs, subdued consumer demand, and long-standing structural challenges are limiting the pace of growth across most sectors.
Although the Future Business Expectation Index dipped slightly to 132.6 points, it remained above its December 2024 level, indicating that businesses are still optimistic about gradual improvement.
However, the moderation reflects uncertainty around policy reforms, operating conditions, and broader political and economic risks.
Overall, the data points to an economy that is expanding, but one that will require targeted reforms, cost containment, and structural improvements to sustain momentum and unlock stronger, more inclusive growth going into 2026.
What you should know
The Central Bank of Nigeria (CBN) reported that Nigeria’s private sector expanded at its fastest pace in 2025 in December, with the Composite Purchasing Managers’ Index (PMI) rising to 57.6 points.
The December PMI data points to strengthening business confidence and sustained economic recovery across Nigeria’s key productive sectors.
In its November 2025 PMI report, Stanbic IBTC Bank Nigeria said input cost inflation in Nigeria’s private sector eased to its weakest rate in almost five years.
