Businesses in Nigeria are facing continued challenges, as reflected in the financial results from companies for the year ended December 31, 2018. Corporate reports show a meager 6.4% revenue growth, with combined earnings reaching N9.74 trillion, up from N9.16 trillion in 2017. This sluggish growth highlights ongoing economic fragility, with the Nigerian economy itself growing by just 1.93% over the year.

Despite weak revenue growth, pre-tax profits saw a significant surge of 170.7%, rising to N4.14 trillion from N1.53 trillion the previous year. This increase in profits is largely attributed to strong performances in the oil and gas sector, as well as the conglomerates industry. However, other key sectors such as banking, agriculture, and consumer goods recorded revenue declines, underscoring the uneven performance across industries.

The construction and real estate sector led revenue growth, posting a 33.4% increase, while the oil and gas sector followed closely with a 31% rise. On the other hand, the agriculture sector saw a 6.9% drop in revenue, with consumer goods and banking sectors also struggling, posting declines of 4.9% and 0.45%, respectively.

In terms of profitability, oil and gas, as well as conglomerates, led the way with an 80.9% rise in pre-tax profit. However, despite the strong revenue growth in construction and real estate, this sector reported a 1,302% decline in pre-tax profit due to significant losses by key players like UAC Property Development and Arbico Plc.

The banking sector, traditionally a top performer, posted mixed results. Overall revenue decreased by 0.45%, with some banks showing marginal growth while others, like Zenith Bank, FBN Holdings, and Union Bank, saw outright declines in revenue. However, there were bright spots within the sector, with Unity Bank recording a 109.9% increase in pre-tax profit and FCMB Group posting a 72% rise.

The consumer goods sector had one of its worst performances, with a 4.9% revenue decline to N1.01 trillion and a 21.8% drop in pre-tax profit. Companies such as Dangote Flour Mills and Nigeria Breweries recorded heavy losses, overshadowing slight gains from firms like Nestle Nigeria and Cadbury.

Analysts and market operators point to several factors behind the weak earnings. Rising insecurity, massive dumping of goods from abroad, and persistent gridlock at Apapa Port have hampered the movement of goods and driven up operational costs. David Adonri, CEO of Highcap Securities, noted that the cost of doing business in Nigeria remains one of the highest globally, and these costs continue to erode profits. He also emphasized the impact of ongoing regulatory constraints and the high levels of non-performing loans burdening the banking sector.

Looking ahead, analysts at United Capital Plc forecast modest recovery in certain sectors for 2019. The Fast-Moving Consumer Goods (FMCG) and oil and gas sectors are expected to benefit from ongoing economic improvements, while the Dangote Refinery project, set to roll out by 2020, is anticipated to reshape the oil and gas industry. In agriculture, government policies and cheaper loans are likely to provide a boost to production, although infrastructure bottlenecks such as the Apapa gridlock may continue to pose challenges.

While some sectors may see gradual improvements, the broader Nigerian economy is likely to face persistent headwinds as companies continue to grapple with security, infrastructural, and regulatory challenges in the near term.