The Centre for the Promotion of Private Enterprise (CPPE) yesterday identified 10 business risks as organisations craft their strategies ahead of 2025.
Some of the risks include forex volatility, interest rate, regulatory, financial and monetary policy, politics and corruption, among others.
“Businesses would have to worry about the following risks as they craft their strategies for 2025. Exposure to the risks varies across sectors.
“Businesses would therefore need to calibrate their strategies according to the level of exposure to these risks,” Dr Muda Yusuf, the Director/CEO of CPPE, said in the 2025 economic outlook.
In the coming year, the CPPE noted that inflation may moderate slightly on the expected reduction of the volatility of the exchange rate and possible rebound of the naira.
The body noted that key drivers of inflation like high energy cost including electricity tariff, exchange rate, transportation cost and high interest rate among others may not completely dissipate in 2025.
“Imported inflation resulting from geopolitical tensions, supply chain disruptions, trade war and tight global monetary conditions,” the body said.
On monetary and financial conditions, the CPPE said given the current disposition of the central bank of Nigeria, monetary conditions may remain tight in 2025.
“However, the degree of tightening may decelerate in 2025 given the current high levels of MPR and CRR. The space for further tightening has become limited,” it said.
In the energy sector, the CPPE said the outlook for the Nigeria energy sector is moderately positive especially following the increased capacity in domestic refining of petroleum products.
“But this will require supportive fiscal and monetary policy support to unlock the full potentials of the domestic refineries and stimulate more investments in the sector,” it said.
The body identified factors that may drive the positive outlook for the sector include enhanced domestic petroleum refining capacity from the Dangote refineries, the Port Harcourt refineries and others; emerging competition among domestic refineries, which may have a moderating effect on prices and expectation of a slump in global energy prices on the back of Trump Presidency and the easing of geopolitical challenges in 2025.
“However, the electricity pricing conundrum would remain a tricky issue in 2025. The economy is too fragile to absorb the shocks of a fully deregulated or commercial electricity market.
“The quality of the transmission infrastructures and the consequent frequent collapse of the transmission grid requires significant investment which the government would have to struggle to provide,” the body said.
“The CPPE called for a deliberate policy to promote legal migration abroad “To fill skill gaps in many of the countries in Europe and North America, especially the United States and Canada.”
It also called for decentralisation of electricity provision and opened up numerous opportunities in the electricity value chain.
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