Limited access to finance now poses the biggest headache for businesses in Nigeria, even as firms’ performance in Africa’s most populous nation maintains a positive foothold for the seventh consecutive month.
“In the month (July), limited access to financing was considered the most significant constraint on business growth,” the Nigeria Economic Summit Group said in its newly published flagship Business Confidence Monitor survey, supported by Stanbic IBTC.
This comes as the Central Bank of Nigeria (CBN) continues its monetary tightening measures in a bid to curb stubbornly high inflation and shore up the naira, which is now more stable than at any time in the past.
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The monetary authorities hiked their benchmark interest rates throughout last year, bringing the borrowing rate to 27.5 percent, down from 18.75 percent at the beginning of 2024, to mop up excess liquidity in the system.
But this hawkish stance is squeezing businesses access to cheap credit needed to boost their portfolios and expansion plans.
While the CBN has maintained the 27.5 percent monetary policy rate for the third straight meeting this year, commercial banks lending rates now hover between 33 percent to 35 percent, burdening firms in Africa’s largest consumer market.
Despite improved macroeconomic conditions, the current business performance index for July slowed to 105.4 points from the 113.6 points it stood at in the prior month as companies grappled with inadequate power supply, unclear economic policies, high commercial lease and property rental costs, and insecurity.
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According to the report, the Future Business Expectation Index also recorded a slight decline to 126.1 points in July 2025, indicating cautious optimism about future business conditions.
But businesses see hope on the horizon. The improved outlook is driven by anticipated gains in the overall business environment, including expectations for an improved business situation, higher operating profits, a rise in production levels, increased cash flow, improved supply orders, and stronger demand conditions.
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At the sectoral level, the manufacturing sector reflects the highest level of optimism as easing inflation and a more stable naira fuel sentiments about future performance.
On the contrary, the agriculture sector shows the lowest confidence in future performance, buoyed by legacy issues such as insecurity, a rather unstable weather condition, and poor storage systems.
