There is a growing murmur in Nigeria’s business corridors – an air of restrained optimism, captured in the April 2025 edition of the NESG-Stanbic IBTC Business Confidence Monitor (BCM). Businesses are cautiously lifting their heads. The overall Current Business Performance Index stands at +12.29, a leap from March’s +6.58, continuing a four-month upward streak. From a purely quantitative perspective, this suggests momentum. But as any economist grounded in reality will caution, numbers alone don’t sustain growth. Structural weaknesses, if unaddressed, eventually catch up.
Sectoral performance shows a spectrum of outcomes. Trade surged to +25.12, buoyed by seasonal spending around two major festivals. Non-manufacturing followed with +23.59, and manufacturing, while modest, remained positive at +8.78. Agriculture and services brought up the rear at +7.02 and +6.54, respectively. The optimism is not unjustified. It reflects the sheer tenacity of Nigerian entrepreneurs – the bike men of the economy – who ride despite potholes, rain, and rough terrain. However, behind the encouraging figures lies a maze of obstacles: ballooning operational costs, declining investments, and policy ambiguity.
As Arturo Bris argues in The Right Place, success in business is not just about effort or capital, it’s about the systemic environment. That environment remains Nigeria’s Achilles heel. In the analogy of the economy as a bike, we may have strong riders and durable engines, but the roads are uneven, potholed, and poorly signposted.
Structural Cracks Beneath Momentum
While businesses are moving forward, they are doing so at a cost. The Cost of Doing Business Index rose sharply to +51.79 in April from +48.44 in March. This seemingly counterintuitive metric – where a higher number reflects worsening conditions – tells a sobering story. Energy costs, real estate rents, transportation, and logistics have all surged. The trade sector, which performed best in April, also posted the highest cost-of-business index at +64.47. Manufacturing and services followed closely with +40.20 and +40.49, respectively.
Power supply remains the single greatest constraint; a sentiment echoed across all sectors. In manufacturing, the cost burden of alternative energy -mostly diesel-powered generators – continues to erode margins. Manufacturers in April reported falling price indices (-25.40) despite rising costs, a phenomenon that threatens the sustainability of their operations. Likewise, agriculture’s performance, while improved, was dragged down by similar inefficiencies. Unreliable electricity affects everything from crop drying to cold storage, especially in agro-allied and poultry operations.
This environment discourages capital investment. The investment index declined to -15.00 overall, with manufacturing posting a meagre +1.50 and trade at -11.50. The implications are significant. When businesses are reluctant to invest, it signals lack of confidence in the policy or macroeconomic outlook. Ricard Vietor, in How Countries Compete, reminds us that countries win not by being everything to everyone, but by ensuring consistency, coordination, and comparative advantage. Nigeria, unfortunately, is undercutting itself with disjointed regulations, weak infrastructure, and fiscal unpredictability.
Policy Confusion and Insecure Terrain
Macroeconomic policy uncertainty is as dangerous as power outages. Business leaders continue to cite incoherent government signals, especially around foreign exchange, taxation, and trade regulation. The BCM survey confirms this, ranking unclear policies among the top five constraints. Even sectors showing growth, such as construction and oil and gas services (up +28.69 and +21.67 respectively), do so not because of coherent strategy but despite its absence.
Forex volatility compounds this issue. Most import-dependent sectors – retail, pharmaceuticals, manufacturing – face unpredictable inventory costs. As businesses plan quarterly or annual operations, the absence of stable exchange guidance distorts pricing, procurement, and investment cycles. Many smaller businesses, especially in trade, operate with thinner buffers. For them, such unpredictability isn’t an inconvenience, it’s existential.
Insecurity remains another silent tax. Agribusinesses, particularly in livestock and forestry, reported that operational continuity is regularly disrupted by banditry or localised conflict. Manufacturers are forced to seek safer but more expensive supply routes. The non-manufacturing sector, despite showing resilience, continues to be throttled by insecurity in construction zones and oil facilities. One cannot attract long-term capital into areas with volatile conditions. Investors aren’t just interested in growth; they seek predictability.
These institutional fragilities are not new, but they are intensifying. Vietor’s case studies on Malaysia, China, and Ireland show that government capability, its ability to coordinate sectors and act consistently is central to growth. Nigeria’s government must realise that inconsistency in one area (say, forex) creates ripples across all sectors.
Hope Is Not a Strategy
Despite the grim challenges, future expectations in the BCM report remain moderately positive. The overall Business Expectations Index is +28.98, with Trade (+69.58), Non-Manufacturing (+48.71), and Manufacturing (+37.27) leading the pack. Even Services (+19.61) and Agriculture (+24.28), while cautious, expect better months ahead.
These sentiments are rooted in anticipated improvements in cash flow (+78.62), operating profit (+73.73), and employment (+53.31). Strong numbers, but we must ask: can they be sustained? A bike rider may temporarily speed up on a patch of good road, but if the rest of the path is riddled with mud and potholes, momentum stalls. Nigeria’s economy, much like the rider, needs a systemic fix, not just temporary acceleration.
One positive development is improved logistics. Reduced port congestion and a stable Naira, albeit temporarily, helped retail and wholesale businesses restock and meet festival demand. However, this boost, driven by seasonal factors and not structural reform, may fade by Q3. Moreover, inflation continues to erode consumer purchasing power. Declining price indices in multiple sectors, while seeming like relief to consumers, indicate weakening demand and profit compression for firms.
In this environment, hoping for sustained growth without institutional repair is fanciful. Nigeria must decide if it wants to grow deliberately or drift unpredictably. The current approach resembles a bike with no clear destination, just motion for its own sake.
Fixing the Road: What’s Needed
The way forward is both simple and difficult: fix the road. Start with power. Decentralise energy markets, invest in mini-grids, and create incentives for private sector participation in off-grid solutions. Consistent energy supply will transform manufacturing, agriculture, and services. Without it, we will forever rely on diesel generators and underutilised potential.
Second, tackle policy clarity. Foreign exchange rules must be transparent and forward-guided. Fiscal planning should be inclusive and devoid of arbitrary levies or overlapping taxes. Policymakers need to shift from reactive firefighting to coherent, long-term planning. The trust deficit in public institutions is wide and must be rebuilt.
Third, finance. The credit gap remains wide, particularly for SMEs. Development finance institutions must be retooled, not merely rebranded. Collateral requirements should be revisited to encourage access without inviting default. The banking sector must also be incentivised to support production, not just consumption.
Fourth, infrastructure. Roads, storage, logistics hubs, and broadband internet are as critical to the modern economy as seaports and refineries. Public-private partnerships can bridge funding gaps, but clarity of contracts and legal enforcement are essential. A Bris-style competitiveness framework would require Nigeria to measure and improve these systemic enablers consistently.
Finally, human capital. Education and skills must align with market needs. Agriculture needs agri-tech. Services need analytics and digital fluency. Manufacturing needs technical operators. A future-ready Nigeria must be built by people who are trained for tomorrow’s jobs, not yesterday’s.
