**Nigeria: Businesses Face Economic Challenges in November 2024**
Against a complex economic backdrop, Nigerian businesses faced significant challenges during the month of November 2024. Despite a slight improvement from the previous month, many structural impediments persist, impacting overall business performance.
According to the NESG-Stanbic IBTC Business Index for November, the Current Activity Index stood at -2.74, up from -23.24 recorded in October, but still indicative of weak overall business activity.
Among the major impediments faced by businesses, power shortages and lack of foreign currency liquidity stand out. Frequent power outages have forced many businesses to resort to costly alternative energy sources to sustain operations in the face of soaring fuel prices.
Exchange rate volatility has also led to higher import costs, further reducing profit margins and complicating pricing strategies. These challenges have impacted companies’ profitability, limiting their ability to grow.
The sector analysis revealed overall negative trends, with declines recorded in the manufacturing and non-manufacturing sectors, as well as in services. However, agriculture and trade recorded slight growth, driven by year-end purchases and harvesting activities.
The costs of doing business have increased sharply, while prices have declined. These figures highlight the increasing challenges companies face in navigating this difficult economic environment.
High borrowing rates are limiting expansion opportunities, discouraging companies from accessing credit. Investment and export activities have particularly suffered, while demand conditions have increased slightly alongside output growth. Despite this, businesses remain cautious as they prepare for the year-end period.
While some seasonal activities have brought some relief, Nigeria’s difficult economic situation persists. Businesses continue to face structural challenges that undermine their development.
In this context, it is crucial for businesses to seek innovative solutions and adapt their strategies to overcome current obstacles. Collaboration between the private sector and public authorities could play a key role in creating a more conducive environment for business and economic growth.