…Manufacturing sector’s record abysmal
…Agricultural Index maintains positive outlook despite earlier drop
By Yahaya Umar
Nigeria’s manufacturing sector recorded a poor business performance in January 2025, according to the Business Confidence Monitor report compiled by the Nigeria Economic Summit Group and Stanbic IBTC.
The manufacturing sector scored -0.66 on the Business Confidence Monitor ,BCM, Index for January 2025.
This reflects a mildly negative performance but a notable recovery from its December 2024 score which was -2.43.
The manufacturing sector had a negative performance alongside the non-manufacturing sector ,-4.64, the Services sector ,-1.40, and Trade ,-0.84. “However, these sectors showed relative improvement compared to December 2024”, the report noted.
In contrast, Agriculture recorded a positive performance with a BCM index of +10.86.
The report further noted that four of the manufacturing sub-sectors assessed recorded mildly negative outcomes, while the others underperformed.
The sub-sectors that underperformed are: Textile, Apparel, and Footwear, Chemical and Pharmaceutical Products, Plastic and Rubber Products, Motor Vehicles and Assembly
It was noted that the Motor Vehicles and Assembly sub-sector “experienced a significant downturn”.
The report also notes that the underperforming sub-sectors “struggled with high production costs, weak demand, and supply chain disruptions”.
The subsectors with mildly negative performances include: Food, Beverages, and Tobacco, Plastic and Rubber Products, Non-Metallic Products, Basic Metal, Iron, and Steel
These subsectors reportedly recorded “weak positive performances, supported by stable domestic demand and seasonal business activities”.
The report shows mixed trends in the manufacturing sector’s key sub-indices.
The Business Situation Index of the Manufacturing sector declined to +21.55 in January, from +24.44 in December
The sector’s Investment Index dropped from +20.79 in December 2024 to -5.77 in January 2025.
In contrast, the Production Index rose significantly to +46.56 from +10.96 in December.
The Operating Cash Flow Index improved to +21.13 in January from +17.49. This is said to reflect higher output and better liquidity.
The report added that the Cost of Doing Business Index at +41.57 and the Price Index at -40.82, indicate “inflationary pressures and high interest rates”.
“Additional constraints included limited credit access ,-5.62, weak exports ,-3.55, and declining operating profits ,-17.41 . Despite signs of recovery, inflation, high financing costs, and supply chain disruptions remain key risks.
“To sustain business growth, manufacturers need policy support, improved credit access, and a stable exchange rate. Without strategic interventions, the sector’s recovery may remain sluggish”, the report states further.
It was stated that Nigeria’s business environment began the new year on a positive note, amidst a weak recovery.
The NESG-Stanbic IBTC Business Confidence Monitor’s ,BCM, Current Business Index rose to +5.69 from +0.77 in December 2024. This is said to reflect “an uptick in commercial activity typical of this period”.
The report adds that structural challenges in Nigeria’s business environment eased slightly, supporting the improved business performance observed during the month.
However, despite the positives, the report notes that high financing costs remained a critical constraint on both current performance and future growth expectations in business activities generally.
It was added that reduced investment ,-27.50, and declining price levels ,-26.62, severely dampened overall business activity and demand.
Other challenges impacting business activities highlighted in the report include frequent power shortages, limited foreign exchange availability, and restricted access to finance.
In the same vein, the agricultural sector in Nigeria maintained a positive business outlook in January 2025, although growth slowed as the Business Confidence Monitor ,BCM, Index declined to +10.85 points from +13.93 points in December 2024.
This was revealed in the recently released NESG-Stanbic IBTC Business Confidence Monitor for January 2025.
This moderation was driven by mixed performances across sub-sectors, with gains in crop production and livestock offset by declines in agro-allied and forestry businesses.
However, the sector remained resilient, supported by a bumper harvest season and improved security conditions in key food-producing regions.
Additionally, dry-season farming activities helped sustain business momentum, ensuring continued food production during a typically low-activity period.
“The Agriculture sector maintained a positive business outlook in January 2025, though growth slowed as the NESG-Stanbic IBTC BCM Index declined to +10.85 points from +13.93 points in December 2024.
This moderation was driven by mixed performances across sub-sectors, with gains in crop production and livestock offset by challenges in agro-allied and forestry businesses. Nonetheless, agricultural activities remained robust, supported by the ongoing bumper harvest season and improved security in key food producing regions.
Additionally, dry-season farming contributed to sustained business activity in the sector by bolstering food production during a typically non-productive period”, the report noted.
Sector-Wide Performance: Growth in Some Sub-Sectors, Decline in Others
According to the NESG-Stanbic IBTC Business Confidence Monitor for January 2025, sector-wide performance was mixed, reflecting both opportunities and constraints:
Crop Production ,+16.96 points, and Livestock ,+5.66 points, recorded modest but positive growth, benefiting from seasonal demand and improved access to agricultural inputs.
Fishing ,+3.20 points, also showed positive sentiment, supported by steady demand and stable water conditions.
Agro-Allied ,-9.17 points, and Forestry ,-1.07 points, recorded declines, primarily due to rising input costs, reduced processing activity, and the typical year-end slowdown in these industries.
Despite these mixed results, agricultural enterprises remained cautiously optimistic, as government interventions and ongoing sectoral reforms continued to provide stability.
The Business Confidence Survey ,BCS, targets business establishments operating in Nigeria that have been engaged in economic activities since early 2023. The survey is administered to senior managers and business executives, providing key insights into sectoral trends.
The NESG-Stanbic IBTC BCM Index combines leading qualitative indicators on production, investment, export demand, prices, employment, and overall business sentiment to assess the level of confidence in Nigeria’s economy.
While the overall agriculture sector remains on a growth trajectory, challenges such as fluctuating input costs, logistical constraints, and climate-related risks could influence business confidence in the coming months.
Analysts anticipate that government policies on food security, financial support for agribusinesses, and infrastructure improvements will play a critical role in shaping the sector’s outlook in 2025.
