The Business Confidence Monitor report has revealed that Nigeria’s services sector experienced negative performance in the nine months of 2024 due to currency fluctuations and higher operating costs.
The report, based on the flagship survey of the Nigerian Economic Society Group (NESG), highlighted that the BCM index for the sector was -2.51 points from January to September 2024.
According to the report, the services sector includes communications and information services, financial institutions, real estate, broadcasting, and professional, scientific and technical services.
“Although the services sector has continued to establish itself as a key driver of economic growth in recent years, its performance remains weak, reflecting the overall business situation in the country,” the report said. There is.
It added that this weakness was due to higher operating costs, exchange rate fluctuations, foreign currency shortages, higher cost of funds and a challenging operating environment.
In 2024, the services sector will continue to be the largest contributor to Nigeria’s GDP, driven by activities such as telecommunications, finance, real estate, arts and entertainment, and will continue to be driven by rapid urbanization, a growing middle class, telecommunications and finance. Expand significantly due to technological advances in services. .
The services sector grew by 5.3% in the first half of 2024, slightly up from 4.4% in the first half of 2023.
“The financial sector, which accounts for 15.8% of the services sector, saw a notable increase of 28.8%, and the ICT sector, which accounts for 44.5%, expanded by 4.4%.However, other subsectors faced challenges with growth rates below 2%. , the transport sector contracted by 13.5%, mainly due to energy shortages and rising business costs,” the report added.
The BCM report states that the biggest negative factors for the current business situation are high prices (-26.14) and restricted access to finance (-21.14), which impact business cash flow (-1.02) and employment (-3.96). He pointed out that he had given.
“Weak production levels and weak demand also constrained economic activity and contributed significantly to Nigeria’s business environment,” the report said.
