…As agric slips into contraction
…Crop production, forestry face security shocks
By Charles Ebi
Nigeria’s business climate recorded modest progress in August 2025, but persistent structural bottlenecks and rising costs are undermining profitability, according to the latest NESG-Stanbic IBTC Business Confidence Monitor ,BCM.
The report, titled “Mixed Signals: Strong Sectoral Growth Versus Structural Hurdles”, showed that the Current Business Performance Index climbed to 107.3 points in August, representing a 1.9-point increase from its July 2025 level.
This marked the sixth consecutive monthly improvement in the index, underscoring the resilience of some sectors despite a challenging operating environment.
The modest gain, however, belies deep-seated vulnerabilities. Analysts noted that while reforms and targeted investments are beginning to pay off in technology, finance, manufacturing, energy, and logistics, firms continue to grapple with high operating costs, limited access to finance, and weak infrastructure.
“This recovery was driven by stronger performance in technology, finance, manufacturing, energy, and logistics, supported by targeted investments and ongoing reforms. However, these gains were tempered by structural bottlenecks affecting operational efficiency and business profitability”, the report said.
Across industries, activity levels improved with trade recording the strongest rebound in August after sliding in July. Manufacturing ,106.2, Non-manufacturing ,116.2, Trade ,114.1, and Services ,103.7, all advanced, highlighting renewed momentum in the broader economy.
Yet agriculture, historically one of Nigeria’s largest employers and a major contributor to GDP, fell into contraction territory, posting 95.6 index points.
This downturn was attributed mainly to contractions in Crop Production and Forestry, two sub-sectors deeply exposed to climate and security risks.
The BCM linked the sector’s weakness to delayed rainfall and shorter wet seasons that disrupted planting cycles, alongside escalating insecurity in rural communities. These twin pressures extended into August and worsened an already fragile sector.
“A breakdown of performance across the five agricultural sub-sectors revealed that two Crop Production and Forestry slipped into contraction, while Livestock and Fishing recovered from the weakness observed in July 2025.
The three expanding sub-sectors of Livestock, Fishing, and Agro-Allied, recorded slight performance improvements compared to July 2025, the report noted.
Rising costs of poultry feed, fertilisers, and other farm inputs were also highlighted as major obstacles. With inflationary pressures squeezing consumers, many farmers and agribusinesses are unable to pass on higher costs, leading to thinning margins and, in many cases, outright closures.
“Rising production costs and declining consumer purchasing power are eroding margins. Price instability and volatile demand add further uncertainty. Consequently, many agribusinesses struggle to reinvest or expand operations, resulting in stagnation and, in some cases, outright closure”, the report warned.
Beyond agriculture, the report stated that firms across industries faced mounting challenges in August.
It added that key sub-indices of the BCM covering investment, exports, access to credit, and prices all registered weaker values compared to July.
Input prices worsened, reversing the marginal relief businesses had enjoyed the previous month.
“The cost of doing business also rose in August, reversing the marginal relief of the previous month. Additionally, input prices continued to worsen during the period. Major constraints restricting growth and performance in August 2025 were limited financing access, unclear economic policies, unreliable electricity supply, high lease and rental costs, and persistent insecurity”, the report added.
These pressures have raised fresh concerns about the sustainability of the recovery.
It explained further that while technology, manufacturing, finance, and trade are powering ahead, their momentum may not be enough to offset drags from agriculture and small-scale enterprises that remain locked out of affordable financing.
The BCM stressed that addressing structural issues is critical to sustaining business confidence. It called for stronger interventions to stabilise the economy, strengthen security, ease access to credit, and upgrade infrastructure.
Analysts also recommended clearer policy direction to boost investor confidence and support expansion across sectors.
“With business conditions still fragile, there is an urgent need for policy measures that stabilise the economy, improve infrastructure, strengthen security, and ease financing access to reinforce the sector’s resilience and contribution to national growth”, the report concluded.
As Nigeria enters the last quarter of 2025, policymakers face a delicate balancing act sustaining the momentum in high-performing sectors while reversing contraction in agriculture, a sector crucial for food security, rural employment, and export diversification.
The choices made in the coming months could determine whether the fragile recovery deepens or falters
