Nigerian businesses battled credit crunch in June amid growth optimism –Report

By Chinwendu Obienyi

Despite a sustained rebound in Nigeria’s business activity, firms across the country grappled with a deepening credit crunch in June 2025, latest NESG-Stanbic IBTC Business Confidence Monitor (BCM) report revealed at the weekend.

The report showed that while business performance and optimism remained on a strong upward trajectory, limited access to finance emerged as the most pressing constraint for operators, reflecting persistent structural weaknesses in the economy.

According to the report, the Current Business Performance Index rose to 113.6 points in June from 109.8 points in May, marking the sixth consecutive month of expansion and reinforcing Nigeria’s gradual economic recovery. A reading above the 100-point benchmark indicates growth.

In addition, the Business Confidence Measure, which tracks sentiment regarding future performance, jumped to 134.5 points, its highest level in 2025, suggesting that firms maintain a positive outlook despite operating headwinds.

Yet, optimism continues to be tested by harsh realities on the ground. The report listed access to finance as the top challenge for businesses during the month, ahead of inadequate power supply, foreign exchange volatility, unclear economic policies, and high property rental costs.

Stating their opinions about the report, economic stakeholders say the rising cost of capital, tightened monetary conditions, and inadequate access to long-term credit are limiting firms’ ability to invest, expand, and hire, especially in the real sector. The manufacturing sector emerged as the top performer, with its sectoral index rising to 123.6 points in June, from 114.4 points in May. Key sub-sectors such as Textile, Apparel and Footwear; Cement; Plastic and Rubber Products; Wood Products, and Paper Products drove this growth.

These industries reported improved production volumes and better supply chain coordination, underpinned by recovering demand. However, manufacturers continued to face significant structural challenges. These include raw material shortages, unstable electricity supply, high import tariffs, and the effects of inflation, all of which are pushing input costs higher.

Also contributing to cost pressures are rising diesel prices and a weakened naira, both of which have increased the cost of imported inputs. The sector is also burdened by multiple taxation, security concerns, and regulatory uncertainty.

In light of these issues, the Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria (CBN) to ease its monetary policy. At its July 21–22 Monetary Policy Committee (MPC) meeting, the CBN chose to retain the benchmark interest rate at 27.5 per cent despite industry appeals for a cut.

“The expectation of MAN is to have a rate cut supported by a robust fiscal policy framework capable of facilitating access to long-term loans and enhancing productivity,” the association said in a statement.

Similarly, the non-manufacturing sector also remained in expansion territory with an index of 120.7 points, though this marked the second consecutive monthly decline, down from 122.2 in May and 123.6 in April.

This slowdown reflects growing concern among service-based industries over rising energy and transport costs, aging infrastructure, and continued foreign exchange instability, which are eroding business margins.

While several sub-sectors continued to post gains, Motor Vehicle and Assembly recorded notable declines. Nonetheless, net-positive performance in other segments ensured the sector maintained a growth trajectory.