Nigeria’s business activity sustained its expansion streak for the twelfth consecutive month in December 2025, underscoring the economy’s resilience despite mounting cost pressures and weakening consumer demand. This assessment is contained in the latest NESG–Stanbic IBTC Business Confidence Monitor (BCM), jointly produced by the Nigerian Economic Summit Group (NESG) and Stanbic IBTC Bank, and titled “Rising Uncertainty Dampens Nigeria’s Current Business Conditions.”
While the headline indicators remained firmly in expansionary territory, the report paints a picture of an economy that is growing more cautiously. Structural bottlenecks, elevated operating costs, and softer demand conditions are increasingly shaping business sentiment, suggesting that momentum, though intact, is moderating.
Growth moderates but remains resilient
According to the report, the Current Business Performance Index eased slightly to 112.0 points in December 2025, down from 113.3 points recorded in November. Despite this marginal slowdown, the index remained well above the 100-point threshold that separates expansion from contraction and stood 11.2 points higher than its level in December 2024. This indicates that business conditions are still significantly stronger than a year earlier.
The BCM noted that the moderation reflects a more cautious stance among businesses, driven largely by subdued consumer purchasing power and persistent cost pressures. Nevertheless, all five major sectors tracked—Agriculture, Manufacturing, Trade, Non-Manufacturing, and Services—remained in expansion during the month, even though three sectors recorded slower growth compared with November.
Sectoral performance highlights
Agriculture emerged as the strongest-performing sector in December, with its BCM index rising by 9.6 points to 112.9. The improvement was attributed to heightened seasonal demand during the festive period, alongside stronger activity in Crop Production, Livestock, and Agro-Allied sub-sectors. Notably, Livestock and Agro-Allied activities exited contraction territory, posting indices of 105.2 and 108.2 points respectively.
Manufacturing also recorded modest improvement, with its index climbing to 117.9 points. Growth in this sector was supported by increased output in Food, Beverages and Tobacco; Textile and Apparel; Plastic and Rubber Products; as well as Electrical and Electronics manufacturing. However, the report highlighted ongoing structural challenges, as sub-sectors such as Cement, Basic Metal, Iron and Steel, and Wood Products slipped into contraction, weighed down by high production costs and supply constraints.
Trade, Non-Manufacturing, and Services all maintained expansion but lost momentum. The Trade index declined to 123.8 points from 132.9 points in November, as festive-season sales were dampened by weak consumer purchasing power. Services recorded its second consecutive slowdown, reflecting weaker activity in Real Estate, Broadcasting, Telecommunications, and Professional Services.
Rising costs and business caution
Across sectors, key sub-indices—including production levels, financial conditions, supply orders, access to credit, and cash flow—recorded moderate declines, signaling growing caution among firms. At the same time, the cost of doing business rose sharply, with the cost index increasing to 61.6 points from 54.3 in November. Surveyed firms cited unreliable electricity supply, insecurity, raw material shortages, rising input prices, and weakening sales as major constraints to operations.
These pressures continue to weigh on margins and investment decisions, limiting the pace at which businesses can scale operations despite overall economic expansion.
What it means for the economy
The December 2025 BCM data suggest that Nigeria’s economy remains on a growth path but is increasingly constrained by long-standing structural issues and near-term cost pressures. Although the Future Business Expectation Index dipped slightly to 132.6 points, it remained above its level from December 2024, indicating that businesses still expect gradual improvement in the months ahead.
However, the moderation in expectations reflects uncertainty around policy reforms, operating conditions, and broader macroeconomic risks. Sustaining momentum into 2026 will likely require targeted reforms to reduce operating costs, improve infrastructure, enhance security, and strengthen consumer purchasing power.
Supporting indicators remain positive
Complementing the BCM findings, the Central Bank of Nigeria (CBN) reported that Nigeria’s private sector expanded at its fastest pace of 2025 in December, with the Composite Purchasing Managers’ Index (PMI) rising to 57.6 points. In addition, Stanbic IBTC’s November 2025 PMI report noted that input cost inflation eased to its weakest level in nearly five years, offering some relief to businesses.
Overall, the data portray an economy that is expanding steadily but cautiously—resilient in the face of challenges, yet in need of deeper structural improvements to unlock stronger, more inclusive growth in the year ahead.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
