Posted Tue, Mar 18, 2025 12:14 PM

Summary of the NESG Private Sector Outlook 2025 Report: Addressing Nigeria’s Economic Challenges and Opportunities

Download The Nigeria's Private Sector in 2025 Adapting to Economic Uncertainty for Growth and Resilience Document

The Nigerian Economic Summit Group (NESG) remains Nigeria’s foremost private sector think tank, dedicated to advancing evidence-based research, policy advocacy, and inclusive dialogue to drive sustainable economic growth and development. As an organisation, we are committed to fostering a stable, predictable, and competitive business environment that enables the private sector to thrive and contribute meaningfully to national development.

Macroeconomic Context: Navigating a Critical Reform Phase

From 2023 to 2024, Nigeria underwent a critical reform phase aimed at addressing long-standing structural inefficiencies and laying the foundation for sustainable economic growth. Key reforms included:

• Exchange Rate Stabilization: The Central Bank of Nigeria (CBN) implemented measures to stabilize the exchange rate and improve external reserves.
• Fuel Subsidy Removal: In May 2023, President Bola Tinubu announced the removal of fuel subsidies to address decades-long inefficiencies in the downstream oil and gas sector and free up fiscal resources for development priorities.

While these reforms were well-intentioned, they had significant short-term impacts on businesses and households:

• Inflation rose sharply from 22.8% in June 2023 to 34.8% in December 2024.
• The CBN Purchasing Managers Index (PMI) fell below 50, remaining in contraction territory until August 2024, signalling a decline in business activity.
• Several multinational corporations announced divestments from Nigeria, citing economic uncertainties and operational challenges.
• Nano, micro, small, and medium-sized enterprises (NMSMEs), which form the backbone of Nigeria’s economy, were particularly affected due to their limited financial capacity to withstand economic shocks.

The Essence of the Private Sector Outlook 2025 Report

The NESG Private Sector Outlook 2025 report, released earlier this year, is a strategic guide for businesses, policymakers, and investors navigating Nigeria’s evolving economic landscape. It provides a comprehensive assessment of the private sector’s performance in 2024, identifies emerging opportunities for 2025, and outlines actionable recommendations to address persistent challenges. The report is a culmination of rigorous research, stakeholder consultations, and data-driven analysis. It evaluates the performance of Nigeria’s private sector in 2024, using a macroeconomic overview and insights from the NESG-Stanbic IBTC Business Confidence Index (BCI). The report also incorporates perspectives from industry experts, institutional stakeholders, and empirical data to provide a balanced and unbiased assessment of the business environment.

Key Findings:

1. Challenges Facing the Private Sector:
   • The private sector in Nigeria continues to face significant challenges, including the high cost of doing business driven by rising energy costs, multiple taxation, and logistical bottlenecks, which hinder productivity and growth. Limited access to affordable credit remains a critical constraint, particularly for micro, small, and medium-sized enterprises (MSMEs), while inadequate infrastructure in power, transportation, and digital connectivity undermines competitiveness.
   • Additionally, inconsistent policies and regulatory bottlenecks create an unpredictable business environment, further exacerbating operational difficulties. These challenges have had a profound impact on MSMEs, with a substantial portion of registered businesses shutting down due to economic pressures, while multinational divestments and business closures have led to significant investment losses, reflecting the broader strain on Nigeria’s economic ecosystem.
      
2. Emerging Opportunities for 2025:
   • Despite the challenges, Nigeria remains an attractive investment destination, with opportunities in:
     • Manufacturing
     • Energy & Resource Development
     • Agro-Processing & Export Growth
     • Technology & Digital Transformation
     • Infrastructure & Real Estate Development
     • Healthcare & Medical Innovations
     • Logistics & Supply Chain Expansion
     • Tourism & Hospitality Growth
        
3. Adaptive Strategies for 2025

The report outlines adaptive strategies businesses can leverage to navigate the challenges and capitalise on new growth prospects. These strategies include:

• Diversification: Exploring opportunities in emerging sectors such as renewable energy, digital economy, and agro-processing.
• Innovation: Adopting technology-driven solutions to enhance productivity and competitiveness.
• Public-Private Collaboration: Strengthening partnerships with government and development partners to address infrastructure deficits and policy bottlenecks.

 

Conclusion and Call to Action

The NESG remains committed to fostering evidence-based policy dialogue and advocacy for sustainable economic development. We will continue to provide strategic insights and recommendations to guide Nigeria’s economic transformation, in line with our Economic Transformation Roadmap.

As we navigate the challenges and opportunities of 2025, we call on all stakeholders—government, private sector, civil society, and development partners—to work together to build a resilient, inclusive, and prosperous economy for all Nigerians.

Download The Nigeria's Private Sector in 2025 Adapting to Economic Uncertainty for Growth and Resilience Document