• Thursday, December 12, 2024
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Negative business conditions signal policy intervention – NESG Survey

Negative business conditions signal policy intervention – NESG Survey

The Nigerian economic summit group (NESG)

The NESG-Stanbic IBTC Business Confidence Monitor (BCM) says Nigeria’s negative business environment seeks critical policy intervention to stabilise financing costs, improve access to affordable credit, and tackle inflationary pressures that impact business activities.

The flagship survey-based report of the Nigerian Economic Summit Group (NESG) and Stanbic IBTC surveyed five economic sectors; Trade, Agriculture, Manufacturing, Non-manufacturing, and Services.

It revealed a negative index of -3.14, indicating pessimistic expectations of business performance improvement driven by the anticipated poor state of the general business situation, production, investment, export, financial performance, supply order, and cash flow.

In the report, there is a varying outlook across the five economic sectors covered, with three having an optimistic posture. Sector indices were +17.82 for Manufacturing, +5.54 for Agriculture, and +1.73 for Non-manufacturing.

In contrast, the Services and Trade sectors were pessimistic about business improvement with a negative of -0.16 and -19.52 indices respectively.

According to the survey, the country’s business operating environment is largely hostile, as underlying business and economic challenges have amplified, showing weaker performance in October 2024.

NESG-Stanbic IBTC’s current business performance index for October 2024 was -23.24, indicating a decline in business activities compared with September 2024.

“Most businesses faced significant hurdles, limiting their growth performance with inadequate power supply, insecurity, and limited access to financing topping the list,” the report said.

Looking ahead, the NESG-Stanbic IBTC’s Future Business Expectation Index registered at -3.14, reflecting a pessimistic outlook across sectors, and concealing notable differences in expectations among sectors.

“The general business situation index, at -13.34, underscores the cautious pessimism suggested by the aggregate index. Expectations of contractions in supply orders, production, investment activities, and exports weigh negatively on the outlook as anticipated improvements in demand conditions, operating profit, and spare capacity are positive contributors,” the report said.

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