NESG: High interest rate, insecurity responsible for low economic growth
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…as manufacturing records steepest decline
By Peter Egwuatu
The Nigerian Economic Summit Group, NESG, says the country’s economic growth rate slowed down in July, 2025.
In the latest NESG-Stanbic IBTC Business Confidence Monitor, BCM, report for July 2025, it linked the decline to high interest rates and insecurity, which took a toll on businesses.
The report stated: “The manufacturing sector led the business slowdown, recording the steepest decline.
“At the start of the third quarter of 2025, businesses in Nigeria sustained a positive performance, with the index remaining in the expansion region for the seventh consecutive month.
The Current Business Index slightly declined to 105.4 points in July, down from 113.6 points in June 2025.
“This slowdown in business performance is attributed to several headwinds, including constrained access to finance due to high interest rates, insecurity, and insufficient power supply. These factors weakened operational stability and business profitability”.
On sectoral analysis, the report revealed a general deceleration across various sectors and broader economic activities.
“ The steepest decline was recorded in Manufacturing, which slipped into the contraction region at 98.0 index points.
“Meanwhile, Non-manufacturing (112.6), Agriculture (107.0), Trade (103.2), and Services (101.9) also saw a slowdown in activity compared to June 2025.
Despite the overall positive business sentiment, structural challenges hindering growth were more pronounced at the sectoral level.
“Key sub-indices of the BCM export, supply order, prices, and employment posted lower values relative to June 2025,” the report stated.
Accordig to the report: “ In contrast, the cost of doing business slightly reversed the upward trend in July, as reflected in input prices during the period. In addition, input prices surged during the period.
“Businesses highlighted major constraints, including limited access to financing, unreliable electricity supply, inconsistent economic policies, high commercial lease and rental costs, and insecurity.”
“These persistent issues continue to challenge business resilience and limit the potential for sustained growth in Nigeria’s business environment.”
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