Nigeria’s agriculture and manufacturing sectors suffered a negative business performance in the first nine months of the year, according to data from the Business Confidence Monitor (BCM) report.
BusinessDay analysis of the BCM report, which is a flagship survey-based report of the Nigerian Economic Summit Group (NESG), reflects how the agricultural sector came and is in fact, still under severe pressure from insecurity, the main driver of a growing dense farming population, in the period under review.
“In the period covered, the BCM index for the agriculture sector stood at -22.22 points, suggesting a mildly negative business performance. This echoes the strains on production activities in the sector as players continue to battle security challenges, infrastructural deficiencies, policy and regulatory inconsistencies, high cost of production, and high cost of finance,” the report said.
The agricultural ecosystem has been under banditry attacks in the last five years. Business production processes are being cut short daily due to declining purchasing power owing to naira devaluation and high inflation rate.
According to the BCM, of the five sub-sectors covered in the agricultural sector, the performance index of crop production, which is the dominant sub-sector, and fishing were negative. However, the performance indices of forestry, livestock and agro-allied were positive.
The report said, “The BCM indices across key performance indicators emphasise the generally constrained operating environment for agribusinesses as indices of business confidence across all the indicators were negative.”
Read also: Manufacturers hard hit by rising rates, insecurity – Survey
“The prices, cost of doing business and operating cash flow indices suggest a significantly negative performance, while general business situation, production, demand condition, investment, export, operating profit, access to credit and employment indices reflect mildly negative performance for agribusinesses,” it added.
Generally, doing business in Africa’s most populous nation has been difficult. Businesses are faced with diverse obstacles from power, to FX volatility, tumbling policies, high energy costs, and naira devaluation.
About six multinational companies exited Nigeria in 2024, including Kimberly-Clark, P & G, GSK, Equinor, Sanofi and Bolt food, to “inhabitable business environment.”
The Manufacturing Association of Nigeria (MAN) constantly decries how rising production costs amid high borrowing costs and low consumer patronage are shrinking the sector’s profitability and threatening its existence.
The report notes that the manufacturing BCM index stood at -6.07 in the first nine months of the year, indicating a mildly negative business performance. While its sub-sectors, including food, beverage & tobacco and textiles, experienced a mildly negative performance over the period with -12.57 and -2.86, respectively.
Additionally, the report depicts how the country’s business operating environment is largely negative, as underlying business and economic challenges have amplified significantly.
“While drastic intervention and reforms by the government in the FX market have improved liquidity and stability, businesses continue to grapple with poor credit access. Consequently, this led to higher input costs of production,” it notes.
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