THE Nigerian Economic Summit Group (NESG) has highlighted some risks and opportunities businesses within the private sector would face in 2025.

The NESG highlighted this in its latest report titled ‘Nigeria’s Private Sector in 2025: Adapting to Economic Uncertainty for Growth and Resilience.’

It said a complex mix of economic, political, and regulatory uncertainties would shape the Nigerian business environment this year.

It pointed out that ongoing government reforms, shifting global economic dynamics, and internal structural challenges would continue to influence market conditions, investment decisions, and business operations.

Key policy changes it noted include the removal of fuel and electricity subsidies, exchange rate harmonisation, and tax reforms.

While these measures are aimed at stabilising the economy and addressing fiscal deficits, they have fuelled inflationary pressures, currency volatility, and rising borrowing costs, complicating the operating landscape for businesses.

Added to the risks are regulatory unpredictability and security concerns facing the private sector.

According to NESG, some of the risks stem from long-standing structural issues, recent economic policies, global market shifts, and evolving socio-political dynamics.

“These risks, if not adequately managed, could undermine business sustainability, investment confidence, and overall economic growth,” it warned.

It categorised the risks more broadly into macroeconomic, political and security, structural and infrastructure, financial and credit, social, and global economic and trade, with each having distinct implications for private sector operations.

The macroeconomic risks include inflationary pressures, high exchange rates, high borrowing costs, and fiscal uncertainties, all of which influence business performance and investment decisions.

A combination of political, security and social risks encompass labour market disruptions, rising unemployment, security concerns, and demographic shifts that affect workforce stability and consumer demand.

It said structural and infrastructure risks such as energy (power) crises, and logistics and transport bottlenecks pose long-term threats to business continuity and resilience.

Further, the emerging risks from global economic and trade dynamics are also creating some level of uncertainty for businesses in Nigeria this year.

“Given the interconnected nature of these risks, Nigerian businesses must assess their potential impact and develop effective mitigation strategies.

The ICIR can report that Nigeria’s public debt worsened to N142.3 trillion in the third quarter of 2024.

With an approved budget of N54.99 trillion for 2025, additional borrowing will likely be required to finance fiscal deficits if revenue targets are missed.

Borrowing costs for businesses remained high as the apex bank recently retained the benchmark interest rate at 27.5 per cent and other parameters.

“These challenges may dampen investor confidence, complicate financial planning, and raise operational costs, further constraining Nigeria’s economic growth in 2025,” NESG stated.

Since the return of Donald Trump to the White House as United States president, Nigeria’s business environment has changed and facing significant challenges due to global supply chain disruptions driven by geopolitical tensions, trade restrictions, and rising shipping costs.

These disruptions will lead to supply shortages, price volatility, and production delays, placing additional pressure on businesses across various industries.

Opportunities

Nigeria’s private sector, if well-positioned, could capitalise on key opportunities that enhance productivity, improve efficiency, reduce costs, and boost profitability, the NESG projected.

It said the opportunities range from cost-effective tax reforms to increased Foreign Direct Investment (FDI) to productivity-enhancing technologies and the revitalisation of local oil refineries that span critical sectors of the economy.

It, however, stated that the level of impact these opportunities would have would vary.

“Notably, six of the twenty economic sectors—Agriculture, Manufacturing, Construction, Trade, Transport, and Financial & Insurance Services—are exposed to at least three direct impacts of these opportunities.

“These high-impact sectors collectively accounted for about 59 per cent of Nigeria’s real GDP, recorded positive growth rates, and contributed about 91 per cent to total real GDP growth in 2024.”

The NESG said it was optimistic that Nigeria remains an attractive destination for investment and business expansion despite global economic uncertainties.

“The country’s large consumer market, expanding digital economy, and ongoing economic reforms create a conducive environment for growth.

“Businesses that embrace localisation, technological innovation, and trade diversification will be best positioned to navigate challenges and seize emerging opportunities,” NESG.

It urged entrepreneurs and investors to strategically align with Nigeria’s evolving economic landscape, land leverage government incentives and reform programmes.

It also urged them to adopt emerging technologies and explore both domestic and international markets to drive sustainable growth and long-term profitability.

Commenting on the report, the president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and chairman of Organised Private Sector of Nigeria (OPSN), Dele Oye, said, “Government must act as a facilitator, not a competitor, in economic affairs. Business organisations should always be in the room when key negotiations take place to ensure broad-based economic benefits.”