The overall performance across most Nigeria’s sectors remained subdued in November 2024, despite seasonal factors such as holiday shopping, harvest activities, concerts, and increased travel, which provided a modest boost to business activity.
This is according to a report by the Nigerian Economic Summit Group-Stanbic IBTC Business Confidence Monitor for November 2024.
The report said businesses operating in Nigeria continued to face setbacks resulting from frequent power shortages, exchange rate instability as well as limited access to finance, as many firms in the period had to rely on expensive alternative energy sources, compounded by already high fuel costs.
Foreign exchange rate instability challenged business operation in the month of November, driving up import costs and adversely affecting profitability and pricing strategies.
“Structural challenges in Nigeria’s business environment persist, driven by growth-limiting economic conditions. Elevated inflation and a depreciating local currency have kept operational
costs and consumer prices significantly high.
“Despite leveraging the typically busier year-end period, businesses are rapidly adjusting their operations to contend with these persistent headwinds. Limited access to financing
remains a significant structural barrier, further constraining business performance in November 2024,” the report stated.
Sub-sectoral analysis highlighted broadly subdued outcomes, with negative performance reported in manufacturing (-3.65), non-manufacturing (-3.62), and services (-2.08).
Meanwhile, modest and weak positive business performance were observed in agriculture (1.17) and trade (0.32) sectors in the period respectively.
Similarly, the cost of doing business Index surged by 51.50, while the Prices Index fell to -32.05, reflecting mounting pressures.
The report showed that the Central Bank of Nigeri (CBN)’s recent hike in the Monetary Policy Rate (MPR) further exacerbated credit costs, placing additional strain on businesses, as access to credit saw only marginal improvement, with fewer firms seeking funds due to prohibitive borrowing
costs.
The most pronounced negative impacts were observed in reduced investment and exports, both of which severely hindered overall business activity.
This follows the latest Gross Domestic Product (GDP) report which showed that Nigeria’s economy grew by 3.46 percent in the third quarter (Q3) of 2024 on a year-on-year basis, which is 0.92 percentage points higher than the rate recorded in Q3 2023 (2.54%). According to the National Bureau of Statistics report.
The growth in the quarter was driven majorly by the services sector, which recorded a growth of 5.19 percent and contributed 53.58 percent to the aggregate GDP.
Economic activity in real terms for Q3 2024 stood at N20.115 trillion, which is higher than the rates recorded in the preceding Q2 2024 which stood at N18.285 million, and the corresponding quarter Q3 2023 which recorded ₦19.44 million.
Oil sector contributed 5.57 percent to the total real GDP while non-oil sector grew by 3.37 percent in real terms in the period.
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