How business analysis, cost awareness can shape Nigeria’s economic future – Expert

At a time when Nigeria’s economy is undergoing significant reform, the question is no longer just about growth but about how businesses can survive, adapt and remain efficient in an increasingly volatile environment. On this, Olamibode Aregbesola, a business analyst and operations professional said the answer lies in a deeper understanding of cost structures and the strategic use of business analysis.

In an interview with our correspondent, Aregbesola described Nigeria’s current economic reality as one defined by contradiction. According to him, recent fiscal and foreign exchange reforms have helped restore a degree of investor confidence and strengthened external reserves, but these gains have yet to translate into meaningful relief for businesses.

“Nigeria’s economy today sits at a crossroads,” he said. “On one hand, government reforms such as fiscal resets, tax reforms, and exchange rate unification have restored investor confidence and boosted foreign reserves. On the other, businesses still grapple with inflationary pressures, high interest rates, weak infrastructure, and an unstable currency.”

Recent data reflects this tension. External reserves rose to about 34.8 billion dollars in 2025, while inflation has remained elevated within the 18 to 23 per cent range. At the same time, borrowing costs have surged, with the monetary policy rate around 27 percent, tightening financial conditions for businesses.

For Aregbesola, however, these headline figures only tell part of the story. He explained that the more pressing challenge lies in the hidden costs that businesses are forced to absorb daily.

“The true cost of doing business goes far beyond taxes or logistics,” he said. “It includes unreliable power, security expenses, and the hidden price of navigating bureaucratic systems. What we see is a dual reality, reform-driven progress hampered by deep-rooted structural inefficiencies.”

He stressed that in such an environment, cost awareness has become critical for survival rather than a routine accounting function. Businesses that fail to understand and anticipate their cost structures, he warned, risk becoming unsustainable in a very short time.

“Cost awareness is no longer just an accounting function; it’s a survival strategy,” he said. “In markets where inputs like fuel, foreign exchange, and transport fluctuate, businesses that fail to analyse and forecast their costs risk losing viability overnight.”

Across Africa, he noted, volatility is not the exception but the norm, making it essential for firms to align spending with value creation and remain flexible in their operations.

“Being cost aware means understanding how every naira spent ties to value creation,” he said. “It’s also about agility, knowing when to pivot operations and seek local alternatives to imported inputs.”

Despite this reality, many Nigerian businesses continue to struggle with effective cost management. Aregbesola identified a recurring weakness in the failure to account for indirect costs, as well as a tendency to confuse cost-cutting with efficiency.

“Many Nigerian firms underestimate indirect costs, things like downtime from power outages, supply delays, or informal payments,” he said. “Others fail to distinguish between cost-cutting and efficiency improvement.”

He warned that such approaches can have long-term consequences that extend beyond immediate financial strain.

“When businesses cut budgets blindly without improving productivity, they cut into the very muscle that sustains growth,” he said. “The immediate consequence is financial fragility, but the deeper one is missed opportunity, failure to invest in technology, data, and skilled people.”

As economic pressures intensify, he argued that business analysis offers a practical pathway for companies to move from reactive decision-making to proactive strategy. By leveraging data and continuously assessing performance, firms can better anticipate risks and respond to changes in the operating environment.

“Business analysis helps firms turn uncertainty into strategy and strategy into results,” he said. “By continuously examining market data, operational performance, and customer trends, analysts can identify inefficiencies and emerging risks early.”

He added that scenario planning has become increasingly important in Nigeria’s volatile environment, where shifts in exchange rates and policy direction can quickly alter cost structures.

“In Nigeria’s volatile environment, business analysis supports scenario planning, testing how exchange rate shifts or policy changes affect costs, pricing, and margins,” he said. “It transforms reactionary management into proactive leadership.”

Beyond Nigeria, he observed that many African economies face similar structural challenges that continue to drive up the cost of doing business and limit competitiveness.

“Africa’s cost structure is burdened by infrastructural problems, expensive energy, weak logistics networks, and limited access to financing,” he said. “In Nigeria, power reliability remains a major driver of operational costs, while import dependence exposes firms to foreign currency risks.”

Addressing these challenges, he argued, requires more than policy statements, but sustained and targeted action supported by strong governance.

“Realistically, addressing these challenges requires targeted public investment in energy and transport, as well as policies that support local manufacturing,” he said. “But beyond policy fixes, accountability and governance reform are essential, because corruption and inefficiency inflate costs more than any tax ever could.”

Looking ahead, he emphasised that both businesses and government must take deliberate steps to reduce costs and improve efficiency if sustainable growth is to be achieved.

“Businesses and governments can reduce costs, improve efficiency, and unlock sustainable growth when businesses invest in technology to eliminate waste, adopt strict data-driven cost tracking, and strengthen local supply chains,” he said. “At the same time, governments must deliver reliable infrastructure, streamline regulations, and support SMEs with accessible financing and reasonable tax policies.”

As Nigeria continues to navigate economic reforms and global uncertainty, his perspective highlights a central reality. The future of business will not be determined by growth alone, but by how effectively costs are understood, managed, and aligned with long-term value.

In that regard, cost awareness and business analysis are no longer optional tools, but essential drivers of resilience, efficiency, and economic transformation.