The services and trade sectors are showing limited optimism for business improvements, as rising operating costs and naira depreciation weigh heavily on their performance. This was revealed in the December 2024 Business Confidence Monitor (BCM) report by the Nigerian Economic Summit Group (NESG) and Stanbic IBTC.
The report highlighted subdued outcomes across sectors, with the Services BCM index declining to -3.46 points in December, down from -2.10 in November, reflecting ongoing operational difficulties. Key challenges for the sector include escalating energy prices, exchange rate depreciation, and high logistics expenses, all of which continue to erode competitiveness and profitability.
Similarly, the Trade sector faced a sharp decline, with its BCM index dropping to -5.59 in December from +0.32 in November. While the sector remains a major employer, particularly in the informal segment, persistent challenges such as limited credit access, high borrowing costs, and strained cash flows have hindered its growth potential.
Despite these challenges, other sectors like non-manufacturing (+40.19), agriculture (+35.58), and manufacturing (+23.15) demonstrated stronger confidence in short-term business performance. However, cautious optimism prevailed across the board, with the Future Business Expectation Index dropping from +33.17 in November to +28.61 in December, indicating a slight decline in overall sentiment.
The report noted that expectations for prices, demand, investment, and financial performance remain central to the cautiously optimistic outlook for the first quarter of 2025. However, rising inflation, high interest rates, and weakened purchasing power continue to weigh on business confidence
