Nigeria’s business environment continues to reflect mixed signals, as the latest Business Performance Index (BPI) shows a moderate uptick to 107.3 points, even as many companies grapple with deepening financial constraints. The figure, recently released by the National Bureau of Statistics (NBS) in collaboration with key industry stakeholders, indicates marginal growth in business activity compared to previous months. However, this improvement is tempered by the widespread challenges firms face in accessing affordable financing.
The index, which measures overall economic activity and business sentiment across various sectors, suggests that while some level of expansion is occurring, the momentum is fragile. Many businesses, especially micro, small, and medium enterprises (MSMEs), are reportedly operating under significant pressure due to high interest rates, limited access to credit, and inflation-induced operational costs.
Economic analysts note that the latest BPI reading signals a cautious optimism within the private sector, particularly in services, manufacturing, and trade. However, beneath the surface lies a growing concern over the cost of capital and persistent cash flow issues, which continue to hinder investment and productivity.
According to industry reports, commercial banks have tightened lending conditions, largely in response to monetary policy adjustments by the Central Bank of Nigeria (CBN). The CBN’s sustained efforts to curb inflation through interest rate hikes have made borrowing more expensive, a situation that disproportionately affects smaller businesses with limited collateral and shorter cash cycles.
Moreover, rising energy costs, supply chain disruptions, and currency volatility have further complicated the business outlook, prompting many firms to scale back expansion plans or delay new projects. Despite these hurdles, some businesses have shown resilience by adopting digital tools, optimizing operations, and exploring alternative financing options such as fintech loans and cooperative schemes.
The BPI’s current level of 107.3 is still above the neutral benchmark of 100, indicating a slight expansion in business activity. Nonetheless, stakeholders have called for urgent policy interventions to ease access to funding, lower the cost of doing business, and stabilise macroeconomic indicators in order to sustain the momentum.
As Nigeria continues to pursue economic reforms and deepen its digital economy initiatives, the ability of firms to access reliable and affordable financing will remain a critical factor in determining the pace of recovery and long-term growth.