NACCIMA, MAN, LCCI, and Others Map Out Strategies for Economic Growth
in

NACCIMA, MAN, LCCI, and Others Map Out Strategies for Economic Growth

Leading private sector organizations in Nigeria have charted a roadmap for economic growth in 2025, following the numerous challenges that hindered businesses’ productivity and growth in 2024. However, they have cautioned business owners to brace for further economic difficulties in the coming year, despite the government’s pledge to foster a business-friendly environment.

In separate discussions with Vanguard, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), the Manufacturers Association of Nigeria (MAN), the Lagos Chamber of Commerce and Industry (LCCI), and the Association of Small Business Owners of Nigeria (ASBON) stressed the need for urgent government reforms to tackle private sector challenges in 2025.

Challenges Faced by Nigerian Businesses in 2024:
In the outgoing year, Nigerian businesses faced several obstacles, including:

  • High production costs and declining demand due to poor infrastructure.
  • Limited access to funds, high lending rates, and the removal of fuel subsidies.
  • Naira devaluation, rising electricity tariffs, and soaring inflation.
  • Shrinking profit margins and weak demand.

The uncertain macroeconomic environment also worsened the investment climate, with both local and foreign investments discouraged. Persistent inflation further undermined economic growth, reducing the competitiveness of domestic industries and hindering expansion efforts.

Inadequate supply and rising energy costs became critical issues for businesses, with many companies relying on costly alternative energy sources to sustain operations amid escalating fuel prices. Foreign exchange volatility also drove up import costs, further tightening profit margins and complicating pricing strategies.

The high cost of borrowing, driven by ongoing hikes in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN), limited expansion opportunities, particularly for manufacturers.

Declining Growth and Business Confidence:
Reflecting the impact of these challenges, the Purchasing Managers’ Index (PMI) report from the CBN showed a contraction in business activity for seven months between January and November 2024. A PMI below 50 index points indicates a contraction in business activities.

According to CBN data, the PMI reading was consistently below 50 from January to July, and again in October and November. The manufacturing sector also recorded a decline in growth, with the National Bureau of Statistics (NBS) reporting a growth rate of 0.92% in the third quarter of 2024, down from 1.2% in Q2 and 1.49% in Q1.

Business confidence in the economy remained low throughout the year. The CBN’s Business Expectations Survey revealed a deterioration in the Business Confidence Index, which fell from -14.3 in January to -33.6 in March, improved to 21.9 in April, but dropped steadily to 0.1 by July before recovering to 3.1 in November.

Outlook for 2025:
Despite these challenges, LCCI projects moderate growth for the manufacturing sector in 2025. Private sector leaders have called for urgent policy reforms to create a more stable and conducive environment for businesses to thrive in the coming year. The focus will be on addressing infrastructure deficits, improving access to finance, stabilizing the currency, and creating a more predictable macroeconomic environment to encourage investment and growth.

Business leaders are cautiously optimistic but remain vigilant about the continued economic headwinds, urging collaboration between the private sector and government to tackle these pressing issues.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

Court Grants N10 Million Bail to Woman Accused of Threatening Seyi Tinubu and IGP

Court Grants N10 Million Bail to Woman Accused of Threatening Seyi Tinubu and IGP

Cynthia Erivo’s 2025 Golden Globes Appearance Sparks Concern Over Drastic Change

Cynthia Erivo’s 2025 Golden Globes Appearance Sparks Concern Over Drastic Change