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By Chinwendu Obienyi
Despite the level of insecurity, Nigeria’s business sentiment strengthened for the second consecutive month in October as easing inflationary pressures and a more stable foreign-exchange market helped lift confidence across key sectors of the economy, according to a new report by the NESG–Stanbic IBTC Business Confidence Monitor (BCM).
The headline Business Confidence Index rose to 111.3 points in October, up from 107.9 in September, marking one of the strongest readings since mid-2024 and a sharp rebound from the 76.8 points recorded a year earlier.
This latest uptick reflects renewed optimism among private-sector operators who have battled cost pressures, FX volatility and policy uncertainty for much of the past two years.
The steady upward trend demonstrates improving perceptions of current business conditions and a more resilient economic outlook,” the report said, noting that both inflation and the exchange rate showed signs of relative stability during the period. Nigeria’s annual inflation rate, while still elevated, has slowed from its February peak, easing pressure on consumer demand and business margins.
All five major sectors monitored by the BCM posted expansionary readings in October, with Manufacturing and Trade recording the strongest gains. Manufacturing surged to 111.3 points, up from 102.5 in September, driven by recoveries in the Food, Beverage & Tobacco and Cement subsectors, which had contracted in the previous month. Businesses cited more reliable power supply, improved access to financing and a steadier FX environment as key factors supporting the rebound.
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Trade rose 7.8 points to 115.4, the highest of all sectors, reflecting stronger wholesale and retail activity as consumer confidence improved alongside easing price growth.
Agriculture also recorded solid momentum, with its index climbing to 111.4 points from 107.3 in September. The report attributed the gain to stronger performances in crop production and agro-allied industries, supported by improved seed varieties and targeted government input-support programmes.
A more stable naira and moderating inflation further helped boost sentiment within the sector. However, the report noted persistent challenges including raw-material shortages, animal-disease outbreaks and rising feed and input costs, which continue to squeeze operators.
Non-manufacturing activity remained robust at 115.0 points, while the Services sector strengthened to 111.0, up from 108.5 in September. Growth in services was broad-based but modest, driven by improvements across multiple sub-sectors amid a calmer macroeconomic backdrop. Still, Professional, Scientific & Technical Services, along with Other Services, experienced slower expansion, underscoring fragility within parts of the sector.
Despite the upbeat readings, the report cautioned that risks remain elevated, particularly around production costs, security challenges, FX liquidity and infrastructure deficits. Sustaining confidence, it said, will require “urgent reforms to stabilise the economy, strengthen infrastructure, enhance security and improve access to credit.”
The BCM’s rise to 111.3 points “signals that private-sector operators are gradually regaining confidence,” the report said. Whether this momentum can be sustained will depend on how effectively the government consolidates recent macroeconomic gains while addressing the underlying structural barriers that continue to weigh on investment.
