Here’s how Nigerian sectors performed in October 2024

In October 2024, business performance across most sectors in Nigeria remained weak. The NESG-Stanbic IBTC’s Current Business Performance Index recorded a net balance of -23.24, reflecting the overall economic inertia dominating the month.

Sub-sectoral analysis revealed in the Business Confidence Monitor (BCM) survey shows a negative business sentiment, with declines in agriculture (-30.47), manufacturing (-28.72), non-manufacturing (-28.16), and trade (-23.45) sectors. The services sector also faced a negative business condition, marked by a net balance of -6.19.

According to the survey, the country’s business operating environment continues to face severe challenges, with several underlying economic issues intensifying.

“Inflation remains high, eroding purchasing power and raising operational costs. Additionally, the Central Bank of Nigeria’s (CBN) hike in the Monetary Policy Rate (MPR) has led to higher credit costs, further straining business operations,” it said.

The report emphasised that the most negative impacts on the current business climate stem from constrained access to finance (-38.04), poor employment levels (-17.30), and limited cash flow (-15.61), increasing the cost of doing business, discouraged investment, weakened demand, and worsened the overall business climate.

“The energy sector’s unreliability, marked by frequent power shortages, forces many companies to rely on costly generators, with the recent surge in fuel prices placing considerable pressure on operational budgets, particularly for small and medium-sized enterprises (SMEs),” it revealed

Read also: Nigeria’s economy ranks low on weaker currency

Here is how each sector performed in October 2024

Agriculture Sector

In October 2024, the NESG-Stanbic IBTC BCM index for the Agriculture sector registered at -30.47 points, signalling a negative business performance which shows the impact of ongoing structural challenges including insecurity, infrastructure deficits, and elevated input costs driven by exchange rate depreciation.

Additionally, persistent flooding in major food-producing states caused by extended rainfall in Q4-2024 has led to significant losses in farmland, crops, yields, and grazing areas. The key performance indicators for the agriculture sector reflect a challenging business environment for agri-businesses. All indicators for the agriculture sector, except for prices, fell into negative territory in October 2024, pointing to a hostile operating landscape.

Manufacturing Sector

Nigeria’s Manufacturing sector faced significant challenges, with the NESG-Stanbic IBTC BCM index dropping to -28.72 in October 2024, reflecting negative business performance and a notable decline from the previous month.

This was driven by high interest rates, elevated inflation, and rising production costs, which continue to pressure the sector, dampen growth prospects, and erode business performance.

However, the key performance indicators further underscored the Manufacturing sector’s struggles amid Nigeria’s challenging business climate. The general business situation index decreased to -26.45, signalling a worsening in business conditions and causing lower production activities (-26.39) and employment (-27.69) in October 2024.

Non-manufacturing Sector

In October 2024, the NESG-Stanbic IBTC BCM index for Nigeria’s non-manufacturing sector registered at -28.16, signalling negative business performance. The widespread weak performance across non-manufacturing sub-sectors aligns with persistent structural and operational difficulties caused by Nigeria’s challenging economic environment.

All sub-sector indices fell into negative performance territory, with Oil and Gas Services experiencing a particularly severe downturn at -66.71. Construction and Other Non-manufacturing industries experienced a negative performance of -23.95 and -43.36. Crude Petroleum and Natural Gas sectors reported less pronounced negative performances at -8.75 and -9.29, respectively.

Services Sector

In October 2024, the NESG-Stanbic IBTC’s Services BCM index registered at -6.19 points, reflecting growing operational challenges, particularly rising energy costs driven by repeated national grid collapses, ongoing fuel shortages, and increased petrol prices.

These factors escalated operating expenses for power and logistics, posing substantial burdens on many Micro, Small and Medium Enterprises (MSMEs) and pressures in the foreign exchange market that led to an 8.1% depreciation of the Naira inflating costs for services businesses reliant on imported inputs.

Other Services sub-sectors reported negative outcomes, with broadcasting (-34.29). The Telecoms (-8.65), Professional Services (-21.33), and Real Estate (-29.88) sectors recorded mild negative performance in the month.

Trade Sector

In October 2024, the NESG-Stanbic IBTC’s Trade BCM index stood at -23.45. The cost of doing business index (+48.69) and investment (-38.23) showed significant deteriorating trends, while other indicators—including general business, business activity, demand condition, supply order, and trade stockpiling—exhibited weaker negative performance.

The operating profit index registered a modest positive at +3.61, attributed to the sector’s ability to pass high costs onto final customers and end users.

The primary driver of the negative performance in the Trade sector and its sub-sectors was limited access to credit from high borrowing costs. Additional pressures came from reduced employment and strained cash flows.