Nigeria’s Business Performance Index (BPI) rose to +12.29 in April 2025, signaling a positive outlook for private sector activities and showing an improvement from the +6.58 recorded in March 2025.
This uptick reflects a gradual, albeit cautious, return of business confidence, driven by improvements in operational outlook, production activity, and marginal gains in the macroeconomic environment.
This was disclosed in the latest NESG-Stanbic IBTC Business Confidence Monitor (BCM) for May 2025, titled “Private Sector Sustains Growth Momentum Amid Obvious Business Risks and Challenges.”
The report noted that the ranking of business constraints in April remained largely unchanged from March, with power supply shortages continuing to rank as the most significant obstacle to business expansion.
This was followed by the rising cost of commercial leases and rental properties, limited access to finance, unclear economic policies, and the restricted availability of foreign exchange.
Manufacturing sector shows resilience
In terms of sectoral performance, the Manufacturing sector posted a BCM Index of +8.78 in April, up slightly from +8.25 in March 2025.
- According to the report, this modest growth demonstrates the sector’s resilience, even as manufacturers grapple with structural constraints.
- These include insufficient production space, which has limited firms’ ability to expand operations, and persistent insecurity, which continues to raise operational costs and depress investor sentiment.
“This situation is exacerbated by widespread insecurity and an unstable macroeconomic environment. As a result, manufacturing firms adopted an extremely cautious approach to production planning in April to mitigate potential losses,” the report stated.
Businesses expressed cautious optimism for the future
The Future Business Expectation Index for the period of one to three months stood at +28.98 in April, a slight increase from +28.04 in March, indicating that businesses maintain a cautiously optimistic outlook for the near term.
This sentiment was buoyed particularly by positive outlooks in the Trade and Non-Manufacturing sectors, where businesses anticipate marginal improvements in demand and profitability.
The key drivers of business optimism in April included:
- Production Index: +59.41
- Export Index: +24.00
- Operating Profit Index: +73.73
- Cash Flow Index: +78.62
- Employment Index: +53.31
These indicators suggest growing expectations of improved financial performance, operational cash flow, and job creation in the coming months.
However, the report warned that the recovery could be stifled by persistent macroeconomic headwinds, including high inflation, elevated interest rates, and weak consumer purchasing power.
The report called on policymakers to urgently address lingering structural issues, particularly in the power sector, monetary policy direction, and financial inclusion, to sustain the positive momentum recorded in the first half of the year.