…As Stanbic IBTC Forecasts 3.55% GDP In Q1, 2025
A new report by the Nigerian Economic Summit Group (NESG), supported by Stanbic IBTC, has indicated that businesses in Nigeria recorded sustained improvement in performance for the second consecutive month in 2025, reflecting favourable business conditions in the year.
The report titled ‘NESG-Stanbic IBTC Business Confidence Monitor for February 2025’ revealed that as a result, the current Business Performance Index for February 2025 stood at +11.50 compared to +5.69 points recorded in January 2025.
Despite the improved performance, the NESG noted that businesses faced significant growth challenges in the month under review, with foreign exchange (FX) constraints, inadequate power supply, unclear economic policies, and limited access to financing ranking top among their constraints.
According to the group, a sub-sectoral analysis showed a generally weak business performance despite positive trends in Trade (+21.48), Manufacturing (+10.35), Non-Manufacturing (+10.21), Services (+7.15), and Agriculture (+2.69).
However, the report’s findings also indicated that most sectors experienced relative improvements compared to January, except Agriculture, which saw a slowdown, as structural challenges in Nigeria’s business environment eased slightly, supporting the observed improvements.
The NESG noted that the overall business climate strengthened, but a higher exchange rate remained a key driver of operational costs and consumer prices while the cost of doing business index remained elevated at +47.18, though slightly lower than in January 2025.
In addition, the report revealed that access to credit also deteriorated (+24.84) due to unfavourable macroeconomic conditions and reduced commercial activity just as high financing costs continued to constrain both current business performance and future growth expectations.
The NESG further clarified: “The most significant negative impacts were reduced investment (-39.50) and declining price levels (-23.78), severely dampening business activity and demand.
“Limited foreign exchange availability, persistent power shortages, unclear economic policies, restricted access to finance, and high commercial lease costs emerged as the most pressing challenges in February, hindering business expansion.
“A primary concern remains the elevated exchange rate of the local currency against major trading currencies, which, alongside rising import costs, continues to erode profitability and disrupt pricing strategies. Limited financing access persisted as a structural barrier, further restricting business growth throughout the month”, the economic group added.
Commenting on the report’s findings within the context of the current micro and macroeconomic factors in the economy, Stanbic IBTC’s management retained the lender’s expectation that crude oil production may increase to an average of 1.63m bpd in 2025 from 1.55m bpd average in 2024, but it may not likely reach the 2.10m bpd government’s aspiration until at least late 2026.
Consequently, the bank maintained its 2025 oil GDP growth forecast of 7.6% y/y in our Jan AMR, adding that the lingering FX stability and improved liquidity bode well for the real sector activities, including Manufacturing, Trade, and Real Estate, in addition to the anticipated reduction in borrowing costs, should further support the growth of the non-oil sector in 2025.
Accordingly, Stanbic IBTC projected the non-oil sector to grow by 3.4% y/y in 2025 and still expected the Nigerian economy to grow by 3.5% y/y in real terms in 2025, with the Q1:25 growth forecasted to settle at 3.55% y/y.
