The Nigerian Economic Summit Group (NESG) and Stanbic IBTC released the March 2025 edition of the monthly Business Confidence Monitor Report. This report provides vital insights into the current business climate in Nigeria, including the levels of optimism, challenges, and economic indicators influencing business operations. As a key gauge of the private sector’s perception of the economy, the Business Confidence Monitor offers an invaluable lens through which businesses, policymakers, and investors can assess current conditions and anticipate future trends. Businesses in Nigeria reported a sustained positive business for the third consecutive month in 2025, signalling favourable business conditions in the year. As a result, the current Business Performance Index for March 2025 stands at +6.58, a weakly positive business performance and a slight decline compared to +11.50 points in February 2025. Although not the top challenge this month, the high cost of commercial lease/rental property remains among the top three business challenges in the last two months. Other top-ranking business challenges include inadequate power supply, limited access to financing, and economic uncertainties.
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Episode Transcript
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Speaker 1 (00:04):
Hello everyone, Welcome to another episode of NSG Radio. My
name is Shay vincent On, economist at the NHG. Today
I have with me doctor shak Reading Tayle economists at
the NSG. Also have with me mister Abdullahzi's Kuranga, economist
Global Markets, Corporate and Investment Banking, Standard Bank Group. We'll
(00:30):
be delving into the March twenty twenty five edition of
the NSG standing IBTC monthly Business Confidence Monitor titled how
new Business Challenges slow growth and dampened Business Outlook in
twenty twenty five. Welcome doctor shark Reading, and welcome mister Kuranga.
Speaker 2 (00:53):
It's nice having this casion with you again, doctor she he.
Speaker 3 (00:58):
It's also good to be on doctor she called, being
here in general again and and it's also interesting to
also be here at the end of Q one and
we'll also will also be interesting to also look at
the situation of the Nigean economy based on the Business
Confidence and Monitor so far in Q on five.
Speaker 1 (01:20):
Yeah, great, fantastic, really looking forward to a very insightful
conversation with you both. Okay, So doctor Shaquaradin, we will
kick off with you. So we see from the report
the March twenty twenty five edition of the report that
the current Business Performance Index stood at six point five
(01:45):
eight in March twenty twenty five. How would you describe
the business environment based on this index number?
Speaker 4 (01:54):
And so, just as we all know that the Business
Confidence Monitor who tries to mirror business performers within the
period we are considering, however, the performance in March sort
of gives us more like a conclusive.
Speaker 2 (02:15):
A picture of what.
Speaker 4 (02:16):
Q one looks like, though it is positive when you
compare business performers in the same period of twenty twenty four. However,
for the match BCM, we sort of observe a slight
decline introspect the business performance and compared with febreak of
the year, and the sort of showed that those businesses
(02:42):
are performing relatively well on the positive side their sales,
they are growths in some cases. However, from the overall
analysis of the index, it shows that this is a
weekly positive business performance and it sort of identifies some
of the imagining threads in the quarter we are we
(03:03):
actually speaking about most especially as we have actually mentioned
in the report that we saw the emergence of some
new business challenges that are relatively muted in proviews and
business months that we have published this in this and
some of these challenges.
Speaker 2 (03:21):
Are around the high cost of.
Speaker 4 (03:24):
Commercial properties or rental properties by businesses. And actually from
an analysis, these businesses actually mentioned that they are to
be the first some of their applitical investments in this period.
All this increment actually eroded their bottom line. So these
are some of the reasons the actually alluded to serve
the weekly Positive business performance in March and twenty five.
Speaker 1 (03:50):
Great fantastic. Okay, so weekly Positive describes the business environment
in March twenty twenty five. We delve into that a
bit more as the interview progresses. Okay, so over to you,
mister Kurannger. So based on the report, we see that
there's been a sustained positive business performance that signals a
(04:16):
favorable business environment, although like doctor Sharks has said, it's
more on the sort of weekly positive side. We do
see that there was a drop in the performance index
from eleven point five and February to six point five
eight in March. What factors would you see are responsible
(04:39):
for this job and is this something that is worrisome?
Speaker 3 (04:44):
Thank you for the question. The deforcing to also not
to still not yet is that we're still in a
period of I investigated environment effects issues as to we've
been seeing some form of instability in the effects market
(05:05):
and the size that we're also still seeing that pride
puratures and still remain aldo lower than words were solar
stables compared to still color. We we still see that
those pore s pases are still them. So these three
key concerns which have been happening over the past and
eighteen months and they remain a source of concerns for
(05:26):
for these businesses. And but O sides that, as some
doctor shakle Do also mentioned and for for this particular month,
it seems as if as if you look at generally febum,
the factors are almost similar. And in March and we
saw that I'M high cost of a rental properties was
(05:46):
like a big challenge and for for these businesses and
March and that sort of um contributed to the weekly
positive and be seen that we saw in the in
the month of March. Side that because March is also
a period of if we look at it, I'M structural
(06:08):
in I'M during periods of im dry season and such
as a March, you tend to see that empower situation
in the Engiguer becomes less and favorable. So the persistence
and power shortages I'm doing the months I'm also contributed
to the weak negative and confidence and monitor and am
(06:29):
based on this I'm solving and so because asides that,
and because interests are still high and so it then
tends to make a access to financing also limited for
for these businesses.
Speaker 5 (06:44):
So these key issues.
Speaker 3 (06:45):
Were like some of the issues that we saw and
facing these businesses in the in the in the month
of our March, and so perhaps we just tend to
also look at the general business and situation also it's
remained un positive and despite and these challenges, and we
saw some improvements and employment opportunities, and we saw some
(07:08):
improvements in opposing profits and even production levels from so
from some of the responses from from these participants. And
but because the negatives and which we we mentioned and
previously before now the sort of like slightly outweigh some
of the positive exort.
Speaker 5 (07:26):
Of that and we saw that slides.
Speaker 3 (07:29):
I'm dropping the current and business index and the factors
of our all responsible and for this the they are
divided into two and the factors that have been responsible
for general business witnesses over the past eighteen months and
new factors. And in conclusion, the general factors over the
(07:52):
past eighteen months and include our interest rates, elevated inflational
cleasures and also and see the decision and the new
factors that we are now seeing generally, especially for the
month of March include did the high cost of rental
properties and persistent and part shortages and also limited access
(08:16):
to financing. Then in some instances you tend to see
some sponsors also mentioning the economic amuncerdenties. So these are
what we see as a factor is responsible for this
and based on that, Sving.
Speaker 1 (08:31):
Thank you very much. And we see some factors have
been sort of persistent over time, but we see some
other factors are emerging and you know, constituting a problem
in the business environment. Thank you very much for that. Okay,
so doctor Sharks to come back to you.
Speaker 6 (08:49):
So the theme for the twenty twenty five BCM is
new business challenges, slow growth and dampened business outlook in
twenty twenty five.
Speaker 1 (09:04):
And you and the Wronger have touched on some of
these new challenges, so if you just like to maybe
go over them again, very briefly and then more particularly
speak about the strategies business can adopt to tackle these challenges.
Speaker 4 (09:26):
So, just like mister Horronger has mentioned that the are
some of these challenges that are more like structure they
have been with the economy or as well as we know,
these issues are there, and I think for those challenges
businesses have actually involved a sort of mitigation strategy to
(09:48):
minimize their impact on their operations their BottomLine.
Speaker 2 (09:51):
And some of these structural challenges are past power issue.
Speaker 4 (09:57):
I think that's really does sing I I have known
how to actually reader to say so there's been also
businesses have evolved have lotally structured your business environment and
business of activities. So doesn't manufacturing sector you see them
having operations running then the period that they are shot
(10:18):
of a part of life from the greed And it's
because for some of them, their equipment are so heavy
that they can't rely on not anative power sources which
would have been more expensive and the cost of business
will have been higher, more fire than the price of
(10:39):
the goods. And you know in busical economics, when you
have great cost of producing an item or an average
cost of a service, desire and its price. What we
are really listening is that the business just shut down.
So what they have done is that they have actually
restructured their operation to actually meets the period where they
are they are shoe or certain of supp life of
(11:02):
power from the national grade. So these are they then
rely on their subsidiary operations, their subsidiary operations to then
to then take care of some of these activities. So
that's what they have done with respect to that. Others
other issues around are interest tribui and effects and their
(11:26):
financing and capability of ability to to get access to credits.
So we all know is there some of them has
actually done a lot around.
Speaker 1 (11:37):
Out the field.
Speaker 4 (11:38):
However, we would then see a situation where imagine on
new businesses are then coming up to then affect their
business operations.
Speaker 2 (11:52):
So these business challenges us like you.
Speaker 4 (11:56):
Have mentioned include the high cost of common salles and renterprocties.
As you know, a lot of this operation actually so
affecting businesses strongly to the next time that businesses actually
are to defer some of their core investment activities simply
(12:21):
due to the issue or challenges relating to high course
and when you don't have location for productions since we
are not in production at all, so these are work
business is actually saying that there is also the issue
or on issue of clarity around the economics economic uncertainty,
(12:47):
as the economic concerned have to infuse some of the
issues of insecurity. We saw it is a relatively dumbing
agricultural has set to a performance in this period. And
just like start wrong, I have said this is as a
result of your starting the dry season of farming in
Nigeria and you know right season farming that we had
(13:09):
some success recorded last year. However for this time we
are not show you of Inseecurity has also increased some
part of the country.
Speaker 2 (13:18):
We saw a relatively spiting increase of terrorist attack.
Speaker 4 (13:22):
In Bomu and some some states in the norths We
saw some increase the bandits activities in the northwest some
of these regions and if you check our Sourve our
Sourvey School or our sampling, we had more like one
in the Natis and one in the north Central bulger
(13:43):
And you have businesses in this area also been concerned
about alsocieties that are related to this. We are also
getting into the political era and from the histue or
historical analysis of Nadian political environment and in names of
those with business.
Speaker 2 (14:01):
And economic activities. So we could see a lot.
Speaker 4 (14:05):
Of these silence but loud in terms of impact affecting
businesses and businesses are not sure where the putting their investment,
and some of these political movements are wish should have
been either silence totally, but they are impact. It's because
of the size of government in terms of our economy
(14:27):
and injury, the size of government and in the world
that some of these government activities procurement.
Speaker 2 (14:33):
The rose the people in business operations.
Speaker 4 (14:38):
It's also very new, so that what businesses are saying
but for the imagine who is around the high costal
renter and the other changes as to do it political
social economy and if you know, we actually a reason
in our reports that would also come at delivering condition
report that we saw increase in small pocket crimes. So
(15:02):
these are crimes that are related to burglary, that are
related to petituet and our businesses that are don't for survivor.
So we are seeing institution with social Ecologmy situation is
having negative externalities in negative impact.
Speaker 2 (15:21):
Or still by effects on businesses.
Speaker 4 (15:24):
So businesses are there having higher costs in securing the
air site of operations. So these are some of those
things that businesses are cually mentioned to us in the narrative,
conciding that their challenges faced in the month of Mark.
Speaker 1 (15:39):
Great, thank you, okay, So what strategies can businesses are
to talk these challenges or you know, have we observed
any of the strategies that are currently being used a
very similar question, so okay, thank you, okay.
Speaker 4 (15:56):
So the businesses they posted the really mentioned was for
them to observe not allocate capital to new investments, so
and which naturally affected their employment to con see the
employment was on the posity was also muted because a
(16:17):
lot of those expansions that we have taken place, we're
actually we're actually put on old we're actually frozen. Not
to ensure they actually observe how they will mitigate this charge.
Speaker 2 (16:29):
Just like our mentioned for those structural.
Speaker 4 (16:32):
Challenges, businesses are work clear strategy or now they will
mitigate them.
Speaker 2 (16:38):
But for this new magint strategy.
Speaker 4 (16:40):
The close the closed option in terms of roadmak or
action plan is either you have your own production site.
In terms of which is an investment, so which businesses
are not ready to take at the moment, so a
lot of them are forced to actually have in a
short term list roach. For business has a long time
(17:02):
of prospects. Having a short term liss it affected the
financial planning even in terms of employment. So some of
them are then going into equipment listening at the moment,
especially for those construction sector, because majority of their activities
are related to document procurements for the real estates. So
the the relatively declining in sales utually also affected them.
(17:26):
So you could see around listening and so for some
of them is to increase their promotion. For some of
them is to actually also diversify in terms of their
source of financing to.
Speaker 2 (17:38):
Ensure that maybe a financial.
Speaker 4 (17:41):
Sector would have opportunity of taking some of these risks
with them and so that it would also affect them.
So it's sort of huge negative decline in telecommunications.
Speaker 2 (17:54):
And they were also very clear around what was driving
their own needed, which is exchange. So there's strategy.
Speaker 4 (18:01):
They still no strategy alternity to sourcing their effects from
the from the official market and les CBN in the
amount of March actually intermined in the market something above
is a four billion dollars the market and sometimes on
emergency intervention in the market to ensure that the depreciation
(18:23):
doesn't affect And so some of these are what itally
comes I'm seeing and the actually actually affected the quality
of Robert services you're having.
Speaker 2 (18:31):
In recent time. So some of these are what the
businesses are.
Speaker 4 (18:34):
Actually saying and and they are they are actually optimistic,
we will say, from the future expectations, but it's also
it's very cautious and the optimism so relatively decam and
you compared it to what we had in February. So
more from them is that they are clear to are
the attack the importing structural challenges that there open up
(19:00):
and but they are just clear around the will continue
business operations and being actually have the weight and wait
and seen approach to if the if those challenges will
persist in the current amount of vapory that would have
that we are also on the feat and were accident
similar questions. But if that we'ld have had businesses are
(19:23):
a fitting them.
Speaker 1 (19:24):
So thank you great, thank you very much for joining
out those insights. Okay, so mister Karanger, we will come
to you. I know you also wanted to weigh in
on the strategies that businesses are currently adopting. But aside
from that, can you also speak about the strategies that
(19:47):
must be adopted by businesses to stay competitive competitive in
the current business climate in general.
Speaker 5 (19:53):
So what you is our curnger Okay, thank you.
Speaker 3 (19:57):
As we can see that the cogent some business and
environment is somewhat I'm challenging and also and that and
also because we are seeing consumers also trying to look
for alternities, especially in the face of high price pleasures
and swellers a limited income. So we think that the
(20:19):
deforced or major strategy for businesses to to to adopt
and to be able to stay competitive in this challenging
and business and environments and will be to understand and
the needs and also the preferences of their consumers of
their customers. So in this case, we will be expecting
(20:42):
businesses and to be adapting their strategies to to cater
to de am evolving and consumer demands, focusing on affordability,
convenience and also call it in I think we're seeing
more of this with the consumer with some companies and where.
Speaker 5 (21:02):
We've seen.
Speaker 3 (21:05):
Sachetization and becoming uncommon in the in the Nigerian economy.
Speaker 5 (21:09):
So you see this company is trying to.
Speaker 3 (21:14):
Satietize their products in order to make these products to
be affordable by the moderatery man. So that's a one
strategy that we're seeing businesses adopting, and we expect businesses
to to continue to adopt still under the customer engagements.
(21:34):
And we believe that diversification of products and services is also.
Speaker 5 (21:40):
An excellent way to try to.
Speaker 3 (21:45):
Increase and competitiveness in these business and climate so because
new markets more far fooish and perspectives.
Speaker 5 (21:55):
Challenges and also opportunities.
Speaker 3 (21:58):
So total reliance on a specific products or markets could
then be limiting the business potentials of a particular company,
especially in this kind of business and environments. So and
if you're then focusing particularly on in single codecs or
in single markets, then and you tend to be more
(22:19):
exposed to economic and downtns.
Speaker 5 (22:23):
So but if you can tap into new and.
Speaker 3 (22:25):
Also some other growing markets wile also diversifying and your
your products sources or your products and services, it tends
to increase your competitiveness or your competitive and advantage as
a business in thiscent currents and business and climate sides
(22:45):
that we know from theory that in relatile situations of
relatile economies, cost control and also cash slow management. It's
also very ortans we cannot emphasize the importance and goal
of cost and control. Of cost control and this we'll
(23:11):
just be in the form of managing your expenses and
also trying as small as possible to to ensure that
your cash flow management is healthy and because and this
are crucial for for your survival as a business, especially
during the figures of uncertainties and so perhaps then you
(23:34):
need to make ensure that these businesses and also prioritize
them liquidity by monitoring both their receivables and also they
are payables. So in this still on the cost control
and cash flow management, we believe all we still expect
(23:54):
that in this case and business issue, those who try
as small as possible to prioritize them liquidity and this
can be done by monitoring their receivables and also their payables.
And if you also have good relationships with your creditors
your suppliers and businesses can also try to negotiate some
(24:17):
favorable payment terms and the aquisher for this a cuisier
for for you to deal and whenever you are in
an uncertain business and environment. So vir God, I'm under
the cost control aspects building a cash reserve and position
and provides you or helps you to build a pafer
(24:38):
against them shocks and also ensuretional contingency while also positioning
the business to seize some opportunities.
Speaker 5 (24:48):
So if you are not able to work withly.
Speaker 3 (24:52):
Ensure managing your your cash flows whenever opportunities are arizies,
especially doing in these currents and business environments, you will
not be able to take some advantage of such and opportunities.
So cost control and cash flow management are a very pusure.
So asides that, the third points I would like to
(25:14):
make in terms of strategies for businesses to adopt to
stay competitive in the current business climate to be that
the people and that are working in that company there
they are your greatest and they are the companies and
greatest assets. So human capital development will always be pushing
(25:37):
in any kind of business and climate or in any
kind of business environments. So in this case, I'm investing
in employee training and developments will be crusher. For for
building is killed and adaptable workforce, the workforce that can
adapt in any kind of situation. So you can't do
this without innovation or without diffil loping your your human term.
(26:02):
So and this, once are able to equip your employees
with the necessary skills you it tends to help the
business stay resilience, especially in the phase of some economic
and challenges. So and again, in this kind of environment
you always see and competition for skilled talents. You always
(26:26):
see that competition intensifying. So as this competition intensifies, businesses
will be needing to invest more in developing and retaining
their own workforce. And because the cost of I'm attracting
new talents will be much more greater than and the
cost of retaining new talents, so I'm retaining your talents.
(26:47):
So businesses will be needing to invest more in developing
and I'm retaining this workforce. As this are involved not
only providing that and competitive and compensation and benefit, but
also creating supportive and work environments, offering opportunities for professional growths,
and also fostering the culture of innovation and inclusion. So
(27:11):
I guess to then now to then also bring it
to the first point on this innovation and inclusion, we
believe companies should also try as not a responsible to
continue to embrace digital and transformation because as internet and
(27:32):
penetration increases and digital infrastructure so improves more businesses and
will our businesses should should actually be adopting the digital
strategies by leveraging technology to innovate. And also i'm compete
and global in so if we look at sectors and
(27:55):
specific and this will be particularly important for businesses that
are with in the agricultural sector, even the healthcare sectors
and also education because in this sectors and digital solutions
can address critical challenges and facing these businesses and also
unlock new opportunities. And finally on the strategies for for
(28:20):
businesses to adults and in this coverents and business environments
and will be focusing on the local markets. So I
guess this also tied ties down to the customer engagement
which which are mentioned and first but on this focusing
on the local markets and they will be.
Speaker 5 (28:41):
That need to embrace and research in this sense.
Speaker 3 (28:48):
Or from understanding the unique needs preferences of the Nigeria
and consumer markets and because this is essential for success.
If you don't really understand the needs and preferences of
your customers, then you are not able to serve them.
So businesses in this case, can try us much as
possible to to to to first start a culture of
(29:11):
creativity and also agility to drive and ekexcellence, encourage new
ways of delivering value. There was five products lines, and
also explore our new markets and be prepared to quickly
pivote whenever you get some new marketing sights. So some
really I'm the the key and strategies we are identifying
(29:32):
for for businesses to stay competitive in this and currents
and business limates and njegram and will be to prioritize
and customer engagement and try as much as possible to
embark on cost control and cash flow and management and
strategies and develop your your human capital and focus on
local markets and also embrace digital transformations.
Speaker 1 (29:56):
Thank you great, fantastic, thank you for that stormary. You know,
just speaking to us about how businesses can cope in
this volatile on certain business environment is absolutely key for
most businesses right now. Okay, all right, so we've talked
a lot about current business performance, you know, in the
(30:18):
short term, how businesses have fared and some of the
challenges that they face now. So now let's look towards
the future. So the Expectations Index, which is, you know,
looking towards the future, stood at twenty eight point zero four,
slightly down from twenty eight point point three too in
February twenty twenty five. And these numbers reflect potious optimistic
(30:43):
expectations about the business environment in the next one to
three months. So what is driving future business expectations? So,
doctor Shallus is for you. So we know we've already
talked about all these challenges, some of them be persistent,
some of them being new. Are these sort of driving
this continuous sort of cloture subsimity of optimistic view, doctor Sharks.
Speaker 4 (31:08):
So for for businesses, you know, business business owners or
businesses are generally the private sector of the very cautious planner,
ortimistic planner and the planning and reality of what they
see at the moment. However, so I always see contributing
to some of this issue aside from the fact that
(31:29):
they were optimistic that the general business environment would improve. However,
some other this is on the downside. Whats is the
demand condition? They explored the demand condition would move from
it's strong through.
Speaker 2 (31:44):
Very close to the cautious level.
Speaker 4 (31:46):
And I think mister Connad has actually mentioned that around
them being consumer demand.
Speaker 2 (31:52):
So they are also sure that the eye inflation eye pleasures.
Speaker 4 (31:56):
However, at the moment you could see the inflation actually
crazy then match the actually reflects on the rack condition.
Speaker 2 (32:04):
So they of the view that the demand condition will
still be weak.
Speaker 4 (32:08):
They're also sure that your investments that we're expect that
businesses will have been done with investments for the year
these since they have had a frozen position which respect
to a locating capital, which is influenced by some of
those that we have mentioned. They're also sure that there
will be weak investments. Their capacity, their carrying capacity to
(32:31):
add more across the board will be weak. And we
actually saw this week itally comes. Itally comes industry, the
stud with the telecom industry, a situation where they are
the bitest face to have carrying capacity. So they are
sure so it was very very weak, patiously very weak.
(32:53):
There's the current capacity to add more in terms of
production for businesses. They were sure that the price expectation
what's also very weak as well.
Speaker 2 (33:04):
You are sure that.
Speaker 4 (33:06):
Price might increase. They might be in some optic on
the price side, and if this happens, it's going to
lead to higher prices of the final goods and services.
Speaker 2 (33:16):
Produced by this friend. And if this happen, is going
to reduce their demand?
Speaker 4 (33:20):
Does that basicallyub demand The higher the price, the lower
the words the quantity demanded. So it's those very busy
they are sure. However, they are also strong drivers of
this optimism in terms of their production. Forgetting you are
is a big economic We are sure that they will
keep producing. You are sure that there will be in business,
(33:43):
but the demand for it, which would then leads to
high inventory. And you know, for some of these businesses,
especially those in trade doesn't manufacturing, and those in non manufacturing,
the high idea inventry and I agree the idea inventry,
the lower the sort of their profitability, and this speaks
(34:04):
to higher inventory, lower demand.
Speaker 2 (34:07):
Among among others.
Speaker 4 (34:08):
For these businesses, they are sure that they're creating profit
to be relatively high because for some of them, especially
those in services, they can move the additional costs in
terms of the higher price to the consumer. I hither
one for those in manufactory, they're not as lucky as
though they could dose stychization that is no more around
(34:29):
assets assets, but in terms of the quantity and quality.
You can then start speaking to to some of these.
So also that they explained that they are cash flow
will relatively be who also be on the strong side,
and their employment also be high.
Speaker 2 (34:46):
So these are some of the drivers they thought who
drive down the strong side.
Speaker 4 (34:51):
But for those down on the way side, I think
they're higher than those on the strong side. So and
when you look at the net performance, so that's why
we are lies, there is the being drops.
Speaker 5 (35:02):
So just like move just to.
Speaker 4 (35:04):
Wrap it though businesses, then a businesses about your concern
so that we are moving into another quarter. So you
are concerned about the following asion. You're concerned about the
rising inflation. You're concerned about high interesting in interest rate?
Is TI high interest rates?
Speaker 2 (35:21):
Yeah, and if the cyby and continuous with your kish approach.
Speaker 4 (35:28):
As inflation has increased, it means there will be higher
interest rates. You are concerned about the weakling or weakening
consumer purchasing power.
Speaker 2 (35:37):
Is that world we see.
Speaker 4 (35:38):
As the three major rings that will affect their performance
in the next three months or in Q two twenty
twenty five.
Speaker 1 (35:46):
Fantastic, Thank you very much for those insights. So, mister Kronger,
to wrap up, would you like to also maybe draw
some insights about the future, what future business canations are
likely to be and if you can also speak to
you know, give sort of a sectual breakdown of any
(36:11):
potential differences across sectors that we might see.
Speaker 5 (36:17):
Thank you. So this is a good question to actually
wrap this up.
Speaker 3 (36:25):
So in terms of what we're seeing generally for this businesses,
we will expect that the we respect that over over
the medium ten between twenty twenty five down to twenty
eight and we expect some conditions to actually improve significantly
(36:47):
relative to what ningegans or what businesses have witnessed between
twenty twenty three and the end of from twenty twenty four.
And so if currently we expect that headline inflation will
be moderating, which means I'M consumer price pleasures should be
(37:08):
moderating over the medium ten and in that case, we'll
be expecting that I'M at some point and you start
to see interestrates.
Speaker 5 (37:15):
Also re using.
Speaker 3 (37:17):
So if that is the case, and we'll be expecting
that business investments and will be improving, consumer sentiments also
be improving. We should also be leading to an improvement
in consumer spending. And for for nine jiguers are today
the business investments and also private consumption expenditure accounts for
(37:41):
but it's a five percent of the entire economy. So
if you're expecting an improvement from those two and go
from a JDP by expenditure and perspective, then it means
that we should be expecting that the Nagian economy will
be growing much more than what we saw the past
and for over the past and three two to four years.
(38:04):
From a stray and from a sectoral perspective, right now,
we've been seeing sculptural reforms and we're finding our operations.
We expect that that also be having a forward and
linkage transformation of forward linkage and impacts on some other
sectors of the economy. And so we expect that industries
(38:26):
and those so some services would be like the major
and propeller of goods for the Nigeian economy over the
next three years. For proper contexts, in twenty twenty four,
services was like the major driver of the Nigerian economy
and because on an attribution business and we're seeing that
(38:48):
services contributed. There was seventy percent of the Nigerian and
GDP growths with it in twenty twenty four. And that's
because industries and agriculture, we're still like in their historical averages,
so we still expect our culture to maintain underperforming.
Speaker 5 (39:06):
It's some long term average.
Speaker 3 (39:08):
But because of the structural reforms and we've seen and
so far and the expectations that these reforms will continue,
and we expect the industries and we then add more
to to contribute to services. So in industries, we expect
that i Coulder refining, could mining and and couder refining
(39:31):
will be a key sector to to look out for.
And we didn't manufacturing, and there are some key sectors
that we didn't manufacturing. If you go back to historical data,
you always see that even when the manufacturing sector is
going at a moderate pace, and these sectors they are
they are increasing more than the growth of the manufacturing sector.
(39:52):
And they are foot production and processing because even according
based on the masters and hierarchy of needs and people.
Speaker 5 (40:01):
We will always eat.
Speaker 3 (40:02):
So food production and processing has always been going more
than a manufacturing GDP goods for most parts I'm going
by historical and data emor size that and chemicals and
pharmaceustical products, and we're also looking at i'm oil refining
as a result of from bedale with the refinery and
other private refinanis also cement and production and motor vehicles
(40:23):
and are saved in respects that these focused sectors will
be like the major drivers of the manufacturing sectors goods and.
Speaker 5 (40:31):
Over the medium ten.
Speaker 3 (40:32):
Within services, we have the enormous structural ones that are
driving the services, which are telecoms and financial institutions. What
our size does two And what we've also been noticing
recently is that this present administration is trying to sort
of and redeals or remove some impediments to trade and
(40:54):
real sceptoral activities. We've also been seeing them trying to
remove some of the protection instant policies which we saw
on the previous and administration. So if this am continuous,
and we expect that did, and we'll also add more
to boost some services good We'll also be expecting construction
and real estate also support goods and generally over the
(41:19):
medium ten. But agriculture is still likely to continue to lag.
It's misteric colors, which is or continue to lag and
it's long term and good it because the structural issues
with agriculture and still remains some prevalent till today.
Speaker 1 (41:34):
Great, thank you very much, mister Kurnger, and so I
think all that's left just so thank you both Creading
and mister Kurranger for joining out those insights for us
from the March twenty twenty five Business Confidence Monitor. It's
been a very interesting, insightful conversation, so thank you to
(41:56):
our listeners as well. You can find this episode and
more at www dot nextgroup dot org Forward Slash Podcast.
You can also download the report that we've been discussing
at www dot nestgroup dot org Forward Slash Research. Thank
you once again, doctor Shaky Rudin and mister Kurannga, thank you.
Speaker 5 (42:19):
Very much, Thank you for having me to thank you.
Speaker 1 (42:22):
Thank you very much. So we hope to have further
discussions when we release other editions of the report. So
thank you very much. Thank you again once again to
our listeners until next time, bye for now.
Hello everyone, Welcome to another episode of NSG Radio. My
name is Shay vincent On, economist at the NHG. Today
I have with me doctor shak Reading Tayle economists at
the NSG. Also have with me mister Abdullahzi's Kuranga, economist
Global Markets, Corporate and Investment Banking, Standard Bank Group. We'll
(00:30):
be delving into the March twenty twenty five edition of
the NSG standing IBTC monthly Business Confidence Monitor titled how
new Business Challenges slow growth and dampened Business Outlook in
twenty twenty five. Welcome doctor shark Reading, and welcome mister Kuranga.
Speaker 2 (00:53):
It's nice having this casion with you again, doctor she he.
Speaker 3 (00:58):
It's also good to be on doctor she called, being
here in general again and and it's also interesting to
also be here at the end of Q one and
we'll also will also be interesting to also look at
the situation of the Nigean economy based on the Business
Confidence and Monitor so far in Q on five.
Speaker 1 (01:20):
Yeah, great, fantastic, really looking forward to a very insightful
conversation with you both. Okay, So doctor Shaquaradin, we will
kick off with you. So we see from the report
the March twenty twenty five edition of the report that
the current Business Performance Index stood at six point five
(01:45):
eight in March twenty twenty five. How would you describe
the business environment based on this index number?
Speaker 4 (01:54):
And so, just as we all know that the Business
Confidence Monitor who tries to mirror business performers within the
period we are considering, however, the performance in March sort
of gives us more like a conclusive.
Speaker 2 (02:15):
A picture of what.
Speaker 4 (02:16):
Q one looks like, though it is positive when you
compare business performers in the same period of twenty twenty four. However,
for the match BCM, we sort of observe a slight
decline introspect the business performance and compared with febreak of
the year, and the sort of showed that those businesses
(02:42):
are performing relatively well on the positive side their sales,
they are growths in some cases. However, from the overall
analysis of the index, it shows that this is a
weekly positive business performance and it sort of identifies some
of the imagining threads in the quarter we are we
(03:03):
actually speaking about most especially as we have actually mentioned
in the report that we saw the emergence of some
new business challenges that are relatively muted in proviews and
business months that we have published this in this and
some of these challenges.
Speaker 2 (03:21):
Are around the high cost of.
Speaker 4 (03:24):
Commercial properties or rental properties by businesses. And actually from
an analysis, these businesses actually mentioned that they are to
be the first some of their applitical investments in this period.
All this increment actually eroded their bottom line. So these
are some of the reasons the actually alluded to serve
the weekly Positive business performance in March and twenty five.
Speaker 1 (03:50):
Great fantastic. Okay, so weekly Positive describes the business environment
in March twenty twenty five. We delve into that a
bit more as the interview progresses. Okay, so over to you,
mister Kurannger. So based on the report, we see that
there's been a sustained positive business performance that signals a
(04:16):
favorable business environment, although like doctor Sharks has said, it's
more on the sort of weekly positive side. We do
see that there was a drop in the performance index
from eleven point five and February to six point five
eight in March. What factors would you see are responsible
(04:39):
for this job and is this something that is worrisome?
Speaker 3 (04:44):
Thank you for the question. The deforcing to also not
to still not yet is that we're still in a
period of I investigated environment effects issues as to we've
been seeing some form of instability in the effects market
(05:05):
and the size that we're also still seeing that pride
puratures and still remain aldo lower than words were solar
stables compared to still color. We we still see that
those pore s pases are still them. So these three
key concerns which have been happening over the past and
eighteen months and they remain a source of concerns for
(05:26):
for these businesses. And but O sides that, as some
doctor shakle Do also mentioned and for for this particular month,
it seems as if as if you look at generally febum,
the factors are almost similar. And in March and we
saw that I'M high cost of a rental properties was
(05:46):
like a big challenge and for for these businesses and
March and that sort of um contributed to the weekly
positive and be seen that we saw in the in
the month of March. Side that because March is also
a period of if we look at it, I'M structural
(06:08):
in I'M during periods of im dry season and such
as a March, you tend to see that empower situation
in the Engiguer becomes less and favorable. So the persistence
and power shortages I'm doing the months I'm also contributed
to the weak negative and confidence and monitor and am
(06:29):
based on this I'm solving and so because asides that,
and because interests are still high and so it then
tends to make a access to financing also limited for
for these businesses.
Speaker 5 (06:44):
So these key issues.
Speaker 3 (06:45):
Were like some of the issues that we saw and
facing these businesses in the in the in the month
of our March, and so perhaps we just tend to
also look at the general business and situation also it's
remained un positive and despite and these challenges, and we
saw some improvements and employment opportunities, and we saw some
(07:08):
improvements in opposing profits and even production levels from so
from some of the responses from from these participants. And
but because the negatives and which we we mentioned and
previously before now the sort of like slightly outweigh some
of the positive exort.
Speaker 5 (07:26):
Of that and we saw that slides.
Speaker 3 (07:29):
I'm dropping the current and business index and the factors
of our all responsible and for this the they are
divided into two and the factors that have been responsible
for general business witnesses over the past eighteen months and
new factors. And in conclusion, the general factors over the
(07:52):
past eighteen months and include our interest rates, elevated inflational
cleasures and also and see the decision and the new
factors that we are now seeing generally, especially for the
month of March include did the high cost of rental
properties and persistent and part shortages and also limited access
(08:16):
to financing. Then in some instances you tend to see
some sponsors also mentioning the economic amuncerdenties. So these are
what we see as a factor is responsible for this
and based on that, Sving.
Speaker 1 (08:31):
Thank you very much. And we see some factors have
been sort of persistent over time, but we see some
other factors are emerging and you know, constituting a problem
in the business environment. Thank you very much for that. Okay,
so doctor Sharks to come back to you.
Speaker 6 (08:49):
So the theme for the twenty twenty five BCM is
new business challenges, slow growth and dampened business outlook in
twenty twenty five.
Speaker 1 (09:04):
And you and the Wronger have touched on some of
these new challenges, so if you just like to maybe
go over them again, very briefly and then more particularly
speak about the strategies business can adopt to tackle these challenges.
Speaker 4 (09:26):
So, just like mister Horronger has mentioned that the are
some of these challenges that are more like structure they
have been with the economy or as well as we know,
these issues are there, and I think for those challenges
businesses have actually involved a sort of mitigation strategy to
(09:48):
minimize their impact on their operations their BottomLine.
Speaker 2 (09:51):
And some of these structural challenges are past power issue.
Speaker 4 (09:57):
I think that's really does sing I I have known
how to actually reader to say so there's been also
businesses have evolved have lotally structured your business environment and
business of activities. So doesn't manufacturing sector you see them
having operations running then the period that they are shot
(10:18):
of a part of life from the greed And it's
because for some of them, their equipment are so heavy
that they can't rely on not anative power sources which
would have been more expensive and the cost of business
will have been higher, more fire than the price of
(10:39):
the goods. And you know in busical economics, when you
have great cost of producing an item or an average
cost of a service, desire and its price. What we
are really listening is that the business just shut down.
So what they have done is that they have actually
restructured their operation to actually meets the period where they
are they are shoe or certain of supp life of
(11:02):
power from the national grade. So these are they then
rely on their subsidiary operations, their subsidiary operations to then
to then take care of some of these activities. So
that's what they have done with respect to that. Others
other issues around are interest tribui and effects and their
(11:26):
financing and capability of ability to to get access to credits.
So we all know is there some of them has
actually done a lot around.
Speaker 1 (11:37):
Out the field.
Speaker 4 (11:38):
However, we would then see a situation where imagine on
new businesses are then coming up to then affect their
business operations.
Speaker 2 (11:52):
So these business challenges us like you.
Speaker 4 (11:56):
Have mentioned include the high cost of common salles and renterprocties.
As you know, a lot of this operation actually so
affecting businesses strongly to the next time that businesses actually
are to defer some of their core investment activities simply
(12:21):
due to the issue or challenges relating to high course
and when you don't have location for productions since we
are not in production at all, so these are work
business is actually saying that there is also the issue
or on issue of clarity around the economics economic uncertainty,
(12:47):
as the economic concerned have to infuse some of the
issues of insecurity. We saw it is a relatively dumbing
agricultural has set to a performance in this period. And
just like start wrong, I have said this is as a
result of your starting the dry season of farming in
Nigeria and you know right season farming that we had
(13:09):
some success recorded last year. However for this time we
are not show you of Inseecurity has also increased some
part of the country.
Speaker 2 (13:18):
We saw a relatively spiting increase of terrorist attack.
Speaker 4 (13:22):
In Bomu and some some states in the norths We
saw some increase the bandits activities in the northwest some
of these regions and if you check our Sourve our
Sourvey School or our sampling, we had more like one
in the Natis and one in the north Central bulger
(13:43):
And you have businesses in this area also been concerned
about alsocieties that are related to this. We are also
getting into the political era and from the histue or
historical analysis of Nadian political environment and in names of
those with business.
Speaker 2 (14:01):
And economic activities. So we could see a lot.
Speaker 4 (14:05):
Of these silence but loud in terms of impact affecting
businesses and businesses are not sure where the putting their investment,
and some of these political movements are wish should have
been either silence totally, but they are impact. It's because
of the size of government in terms of our economy
(14:27):
and injury, the size of government and in the world
that some of these government activities procurement.
Speaker 2 (14:33):
The rose the people in business operations.
Speaker 4 (14:38):
It's also very new, so that what businesses are saying
but for the imagine who is around the high costal
renter and the other changes as to do it political
social economy and if you know, we actually a reason
in our reports that would also come at delivering condition
report that we saw increase in small pocket crimes. So
(15:02):
these are crimes that are related to burglary, that are
related to petituet and our businesses that are don't for survivor.
So we are seeing institution with social Ecologmy situation is
having negative externalities in negative impact.
Speaker 2 (15:21):
Or still by effects on businesses.
Speaker 4 (15:24):
So businesses are there having higher costs in securing the
air site of operations. So these are some of those
things that businesses are cually mentioned to us in the narrative,
conciding that their challenges faced in the month of Mark.
Speaker 1 (15:39):
Great, thank you, okay, So what strategies can businesses are
to talk these challenges or you know, have we observed
any of the strategies that are currently being used a
very similar question, so okay, thank you, okay.
Speaker 4 (15:56):
So the businesses they posted the really mentioned was for
them to observe not allocate capital to new investments, so
and which naturally affected their employment to con see the
employment was on the posity was also muted because a
(16:17):
lot of those expansions that we have taken place, we're
actually we're actually put on old we're actually frozen. Not
to ensure they actually observe how they will mitigate this charge.
Speaker 2 (16:29):
Just like our mentioned for those structural.
Speaker 4 (16:32):
Challenges, businesses are work clear strategy or now they will
mitigate them.
Speaker 2 (16:38):
But for this new magint strategy.
Speaker 4 (16:40):
The close the closed option in terms of roadmak or
action plan is either you have your own production site.
In terms of which is an investment, so which businesses
are not ready to take at the moment, so a
lot of them are forced to actually have in a
short term list roach. For business has a long time
(17:02):
of prospects. Having a short term liss it affected the
financial planning even in terms of employment. So some of
them are then going into equipment listening at the moment,
especially for those construction sector, because majority of their activities
are related to document procurements for the real estates. So
the the relatively declining in sales utually also affected them.
(17:26):
So you could see around listening and so for some
of them is to increase their promotion. For some of
them is to actually also diversify in terms of their
source of financing to.
Speaker 2 (17:38):
Ensure that maybe a financial.
Speaker 4 (17:41):
Sector would have opportunity of taking some of these risks
with them and so that it would also affect them.
So it's sort of huge negative decline in telecommunications.
Speaker 2 (17:54):
And they were also very clear around what was driving
their own needed, which is exchange. So there's strategy.
Speaker 4 (18:01):
They still no strategy alternity to sourcing their effects from
the from the official market and les CBN in the
amount of March actually intermined in the market something above
is a four billion dollars the market and sometimes on
emergency intervention in the market to ensure that the depreciation
(18:23):
doesn't affect And so some of these are what itally
comes I'm seeing and the actually actually affected the quality
of Robert services you're having.
Speaker 2 (18:31):
In recent time. So some of these are what the
businesses are.
Speaker 4 (18:34):
Actually saying and and they are they are actually optimistic,
we will say, from the future expectations, but it's also
it's very cautious and the optimism so relatively decam and
you compared it to what we had in February. So
more from them is that they are clear to are
the attack the importing structural challenges that there open up
(19:00):
and but they are just clear around the will continue
business operations and being actually have the weight and wait
and seen approach to if the if those challenges will
persist in the current amount of vapory that would have
that we are also on the feat and were accident
similar questions. But if that we'ld have had businesses are
(19:23):
a fitting them.
Speaker 1 (19:24):
So thank you great, thank you very much for joining
out those insights. Okay, so mister Karanger, we will come
to you. I know you also wanted to weigh in
on the strategies that businesses are currently adopting. But aside
from that, can you also speak about the strategies that
(19:47):
must be adopted by businesses to stay competitive competitive in
the current business climate in general.
Speaker 5 (19:53):
So what you is our curnger Okay, thank you.
Speaker 3 (19:57):
As we can see that the cogent some business and
environment is somewhat I'm challenging and also and that and
also because we are seeing consumers also trying to look
for alternities, especially in the face of high price pleasures
and swellers a limited income. So we think that the
(20:19):
deforced or major strategy for businesses to to to adopt
and to be able to stay competitive in this challenging
and business and environments and will be to understand and
the needs and also the preferences of their consumers of
their customers. So in this case, we will be expecting
(20:42):
businesses and to be adapting their strategies to to cater
to de am evolving and consumer demands, focusing on affordability,
convenience and also call it in I think we're seeing
more of this with the consumer with some companies and where.
Speaker 5 (21:02):
We've seen.
Speaker 3 (21:05):
Sachetization and becoming uncommon in the in the Nigerian economy.
Speaker 5 (21:09):
So you see this company is trying to.
Speaker 3 (21:14):
Satietize their products in order to make these products to
be affordable by the moderatery man. So that's a one
strategy that we're seeing businesses adopting, and we expect businesses
to to continue to adopt still under the customer engagements.
(21:34):
And we believe that diversification of products and services is also.
Speaker 5 (21:40):
An excellent way to try to.
Speaker 3 (21:45):
Increase and competitiveness in these business and climate so because
new markets more far fooish and perspectives.
Speaker 5 (21:55):
Challenges and also opportunities.
Speaker 3 (21:58):
So total reliance on a specific products or markets could
then be limiting the business potentials of a particular company,
especially in this kind of business and environments. So and
if you're then focusing particularly on in single codecs or
in single markets, then and you tend to be more
(22:19):
exposed to economic and downtns.
Speaker 5 (22:23):
So but if you can tap into new and.
Speaker 3 (22:25):
Also some other growing markets wile also diversifying and your
your products sources or your products and services, it tends
to increase your competitiveness or your competitive and advantage as
a business in thiscent currents and business and climate sides
(22:45):
that we know from theory that in relatile situations of
relatile economies, cost control and also cash slow management. It's
also very ortans we cannot emphasize the importance and goal
of cost and control. Of cost control and this we'll
(23:11):
just be in the form of managing your expenses and
also trying as small as possible to to ensure that
your cash flow management is healthy and because and this
are crucial for for your survival as a business, especially
during the figures of uncertainties and so perhaps then you
(23:34):
need to make ensure that these businesses and also prioritize
them liquidity by monitoring both their receivables and also they
are payables. So in this still on the cost control
and cash flow management, we believe all we still expect
(23:54):
that in this case and business issue, those who try
as small as possible to prioritize them liquidity and this
can be done by monitoring their receivables and also their payables.
And if you also have good relationships with your creditors
your suppliers and businesses can also try to negotiate some
(24:17):
favorable payment terms and the aquisher for this a cuisier
for for you to deal and whenever you are in
an uncertain business and environment. So vir God, I'm under
the cost control aspects building a cash reserve and position
and provides you or helps you to build a pafer
(24:38):
against them shocks and also ensuretional contingency while also positioning
the business to seize some opportunities.
Speaker 5 (24:48):
So if you are not able to work withly.
Speaker 3 (24:52):
Ensure managing your your cash flows whenever opportunities are arizies,
especially doing in these currents and business environments, you will
not be able to take some advantage of such and opportunities.
So cost control and cash flow management are a very pusure.
So asides that, the third points I would like to
(25:14):
make in terms of strategies for businesses to adopt to
stay competitive in the current business climate to be that
the people and that are working in that company there
they are your greatest and they are the companies and
greatest assets. So human capital development will always be pushing
(25:37):
in any kind of business and climate or in any
kind of business environments. So in this case, I'm investing
in employee training and developments will be crusher. For for
building is killed and adaptable workforce, the workforce that can
adapt in any kind of situation. So you can't do
this without innovation or without diffil loping your your human term.
(26:02):
So and this, once are able to equip your employees
with the necessary skills you it tends to help the
business stay resilience, especially in the phase of some economic
and challenges. So and again, in this kind of environment
you always see and competition for skilled talents. You always
(26:26):
see that competition intensifying. So as this competition intensifies, businesses
will be needing to invest more in developing and retaining
their own workforce. And because the cost of I'm attracting
new talents will be much more greater than and the
cost of retaining new talents, so I'm retaining your talents.
(26:47):
So businesses will be needing to invest more in developing
and I'm retaining this workforce. As this are involved not
only providing that and competitive and compensation and benefit, but
also creating supportive and work environments, offering opportunities for professional growths,
and also fostering the culture of innovation and inclusion. So
(27:11):
I guess to then now to then also bring it
to the first point on this innovation and inclusion, we
believe companies should also try as not a responsible to
continue to embrace digital and transformation because as internet and
(27:32):
penetration increases and digital infrastructure so improves more businesses and
will our businesses should should actually be adopting the digital
strategies by leveraging technology to innovate. And also i'm compete
and global in so if we look at sectors and
(27:55):
specific and this will be particularly important for businesses that
are with in the agricultural sector, even the healthcare sectors
and also education because in this sectors and digital solutions
can address critical challenges and facing these businesses and also
unlock new opportunities. And finally on the strategies for for
(28:20):
businesses to adults and in this coverents and business environments
and will be focusing on the local markets. So I
guess this also tied ties down to the customer engagement
which which are mentioned and first but on this focusing
on the local markets and they will be.
Speaker 5 (28:41):
That need to embrace and research in this sense.
Speaker 3 (28:48):
Or from understanding the unique needs preferences of the Nigeria
and consumer markets and because this is essential for success.
If you don't really understand the needs and preferences of
your customers, then you are not able to serve them.
So businesses in this case, can try us much as
possible to to to to first start a culture of
(29:11):
creativity and also agility to drive and ekexcellence, encourage new
ways of delivering value. There was five products lines, and
also explore our new markets and be prepared to quickly
pivote whenever you get some new marketing sights. So some
really I'm the the key and strategies we are identifying
(29:32):
for for businesses to stay competitive in this and currents
and business limates and njegram and will be to prioritize
and customer engagement and try as much as possible to
embark on cost control and cash flow and management and
strategies and develop your your human capital and focus on
local markets and also embrace digital transformations.
Speaker 1 (29:56):
Thank you great, fantastic, thank you for that stormary. You know,
just speaking to us about how businesses can cope in
this volatile on certain business environment is absolutely key for
most businesses right now. Okay, all right, so we've talked
a lot about current business performance, you know, in the
(30:18):
short term, how businesses have fared and some of the
challenges that they face now. So now let's look towards
the future. So the Expectations Index, which is, you know,
looking towards the future, stood at twenty eight point zero four,
slightly down from twenty eight point point three too in
February twenty twenty five. And these numbers reflect potious optimistic
(30:43):
expectations about the business environment in the next one to
three months. So what is driving future business expectations? So,
doctor Shallus is for you. So we know we've already
talked about all these challenges, some of them be persistent,
some of them being new. Are these sort of driving
this continuous sort of cloture subsimity of optimistic view, doctor Sharks.
Speaker 4 (31:08):
So for for businesses, you know, business business owners or
businesses are generally the private sector of the very cautious planner,
ortimistic planner and the planning and reality of what they
see at the moment. However, so I always see contributing
to some of this issue aside from the fact that
(31:29):
they were optimistic that the general business environment would improve. However,
some other this is on the downside. Whats is the
demand condition? They explored the demand condition would move from
it's strong through.
Speaker 2 (31:44):
Very close to the cautious level.
Speaker 4 (31:46):
And I think mister Connad has actually mentioned that around
them being consumer demand.
Speaker 2 (31:52):
So they are also sure that the eye inflation eye pleasures.
Speaker 4 (31:56):
However, at the moment you could see the inflation actually
crazy then match the actually reflects on the rack condition.
Speaker 2 (32:04):
So they of the view that the demand condition will
still be weak.
Speaker 4 (32:08):
They're also sure that your investments that we're expect that
businesses will have been done with investments for the year
these since they have had a frozen position which respect
to a locating capital, which is influenced by some of
those that we have mentioned. They're also sure that there
will be weak investments. Their capacity, their carrying capacity to
(32:31):
add more across the board will be weak. And we
actually saw this week itally comes. Itally comes industry, the
stud with the telecom industry, a situation where they are
the bitest face to have carrying capacity. So they are
sure so it was very very weak, patiously very weak.
(32:53):
There's the current capacity to add more in terms of
production for businesses. They were sure that the price expectation
what's also very weak as well.
Speaker 2 (33:04):
You are sure that.
Speaker 4 (33:06):
Price might increase. They might be in some optic on
the price side, and if this happens, it's going to
lead to higher prices of the final goods and services.
Speaker 2 (33:16):
Produced by this friend. And if this happen, is going
to reduce their demand?
Speaker 4 (33:20):
Does that basicallyub demand The higher the price, the lower
the words the quantity demanded. So it's those very busy
they are sure. However, they are also strong drivers of
this optimism in terms of their production. Forgetting you are
is a big economic We are sure that they will
keep producing. You are sure that there will be in business,
(33:43):
but the demand for it, which would then leads to
high inventory. And you know, for some of these businesses,
especially those in trade doesn't manufacturing, and those in non manufacturing,
the high idea inventry and I agree the idea inventry,
the lower the sort of their profitability, and this speaks
(34:04):
to higher inventory, lower demand.
Speaker 2 (34:07):
Among among others.
Speaker 4 (34:08):
For these businesses, they are sure that they're creating profit
to be relatively high because for some of them, especially
those in services, they can move the additional costs in
terms of the higher price to the consumer. I hither
one for those in manufactory, they're not as lucky as
though they could dose stychization that is no more around
(34:29):
assets assets, but in terms of the quantity and quality.
You can then start speaking to to some of these.
So also that they explained that they are cash flow
will relatively be who also be on the strong side,
and their employment also be high.
Speaker 2 (34:46):
So these are some of the drivers they thought who
drive down the strong side.
Speaker 4 (34:51):
But for those down on the way side, I think
they're higher than those on the strong side. So and
when you look at the net performance, so that's why
we are lies, there is the being drops.
Speaker 5 (35:02):
So just like move just to.
Speaker 4 (35:04):
Wrap it though businesses, then a businesses about your concern
so that we are moving into another quarter. So you
are concerned about the following asion. You're concerned about the
rising inflation. You're concerned about high interesting in interest rate?
Is TI high interest rates?
Speaker 2 (35:21):
Yeah, and if the cyby and continuous with your kish approach.
Speaker 4 (35:28):
As inflation has increased, it means there will be higher
interest rates. You are concerned about the weakling or weakening
consumer purchasing power.
Speaker 2 (35:37):
Is that world we see.
Speaker 4 (35:38):
As the three major rings that will affect their performance
in the next three months or in Q two twenty
twenty five.
Speaker 1 (35:46):
Fantastic, Thank you very much for those insights. So, mister Kronger,
to wrap up, would you like to also maybe draw
some insights about the future, what future business canations are
likely to be and if you can also speak to
you know, give sort of a sectual breakdown of any
(36:11):
potential differences across sectors that we might see.
Speaker 5 (36:17):
Thank you. So this is a good question to actually
wrap this up.
Speaker 3 (36:25):
So in terms of what we're seeing generally for this businesses,
we will expect that the we respect that over over
the medium ten between twenty twenty five down to twenty
eight and we expect some conditions to actually improve significantly
(36:47):
relative to what ningegans or what businesses have witnessed between
twenty twenty three and the end of from twenty twenty four.
And so if currently we expect that headline inflation will
be moderating, which means I'M consumer price pleasures should be
(37:08):
moderating over the medium ten and in that case, we'll
be expecting that I'M at some point and you start
to see interestrates.
Speaker 5 (37:15):
Also re using.
Speaker 3 (37:17):
So if that is the case, and we'll be expecting
that business investments and will be improving, consumer sentiments also
be improving. We should also be leading to an improvement
in consumer spending. And for for nine jiguers are today
the business investments and also private consumption expenditure accounts for
(37:41):
but it's a five percent of the entire economy. So
if you're expecting an improvement from those two and go
from a JDP by expenditure and perspective, then it means
that we should be expecting that the Nagian economy will
be growing much more than what we saw the past
and for over the past and three two to four years.
(38:04):
From a stray and from a sectoral perspective, right now,
we've been seeing sculptural reforms and we're finding our operations.
We expect that that also be having a forward and
linkage transformation of forward linkage and impacts on some other
sectors of the economy. And so we expect that industries
(38:26):
and those so some services would be like the major
and propeller of goods for the Nigeian economy over the
next three years. For proper contexts, in twenty twenty four,
services was like the major driver of the Nigerian economy
and because on an attribution business and we're seeing that
(38:48):
services contributed. There was seventy percent of the Nigerian and
GDP growths with it in twenty twenty four. And that's
because industries and agriculture, we're still like in their historical averages,
so we still expect our culture to maintain underperforming.
Speaker 5 (39:06):
It's some long term average.
Speaker 3 (39:08):
But because of the structural reforms and we've seen and
so far and the expectations that these reforms will continue,
and we expect the industries and we then add more
to to contribute to services. So in industries, we expect
that i Coulder refining, could mining and and couder refining
(39:31):
will be a key sector to to look out for.
And we didn't manufacturing, and there are some key sectors
that we didn't manufacturing. If you go back to historical data,
you always see that even when the manufacturing sector is
going at a moderate pace, and these sectors they are
they are increasing more than the growth of the manufacturing sector.
(39:52):
And they are foot production and processing because even according
based on the masters and hierarchy of needs and people.
Speaker 5 (40:01):
We will always eat.
Speaker 3 (40:02):
So food production and processing has always been going more
than a manufacturing GDP goods for most parts I'm going
by historical and data emor size that and chemicals and
pharmaceustical products, and we're also looking at i'm oil refining
as a result of from bedale with the refinery and
other private refinanis also cement and production and motor vehicles
(40:23):
and are saved in respects that these focused sectors will
be like the major drivers of the manufacturing sectors goods and.
Speaker 5 (40:31):
Over the medium ten.
Speaker 3 (40:32):
Within services, we have the enormous structural ones that are
driving the services, which are telecoms and financial institutions. What
our size does two And what we've also been noticing
recently is that this present administration is trying to sort
of and redeals or remove some impediments to trade and
(40:54):
real sceptoral activities. We've also been seeing them trying to
remove some of the protection instant policies which we saw
on the previous and administration. So if this am continuous,
and we expect that did, and we'll also add more
to boost some services good We'll also be expecting construction
and real estate also support goods and generally over the
(41:19):
medium ten. But agriculture is still likely to continue to lag.
It's misteric colors, which is or continue to lag and
it's long term and good it because the structural issues
with agriculture and still remains some prevalent till today.
Speaker 1 (41:34):
Great, thank you very much, mister Kurnger, and so I
think all that's left just so thank you both Creading
and mister Kurranger for joining out those insights for us
from the March twenty twenty five Business Confidence Monitor. It's
been a very interesting, insightful conversation, so thank you to
(41:56):
our listeners as well. You can find this episode and
more at www dot nextgroup dot org Forward Slash Podcast.
You can also download the report that we've been discussing
at www dot nestgroup dot org Forward Slash Research. Thank
you once again, doctor Shaky Rudin and mister Kurannga, thank you.
Speaker 5 (42:19):
Very much, Thank you for having me to thank you.
Speaker 1 (42:22):
Thank you very much. So we hope to have further
discussions when we release other editions of the report. So
thank you very much. Thank you again once again to
our listeners until next time, bye for now.
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