High costs, weak credit keep business confidence subdued despite June expansion–NESG
Nigeria’s business environment remained in expansion territory in June 2026, although growth slowed compared with a year earlier as high operating costs, limited access to credit and infrastructure challenges continued to weigh on businesses.
The June 2026 Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG) showed the Current Business Performance Index remained unchanged at 104.6 points in June, matching the reading recorded in May.
Despite remaining above the 100-point threshold that signals expansion, the index was significantly lower than the 113.6 points recorded in June 2025, indicating a slower pace of business growth.
According to the report, manufacturing, agriculture, non-manufacturing and trade sectors sustained expansion during the month, while the services sector slipped into contraction.
“The NESG Business Confidence Monitor (BCM) Current Business Performance Index was unchanged at 104.6 points relative to May 2026, but this marked a significant decline from 113.6 points in June 2025,” the report stated.
The report noted that key business indicators, including production, demand, operating profit, financial performance, supply orders, cash flow, employment and access to credit, remained in expansion territory, although investment and exports stayed weak while trade stockpiling contracted.
NESG said businesses continued to grapple with limited access to finance, persistent electricity shortages, rising rental costs, insecurity and infrastructure deficiencies, despite a slight moderation in overall operating costs.
Sectoral performance remained mixed during the month.
Agriculture returned to expansion with its Business Confidence Index rising to 103.9 points from 97.5 points in May, supported by early harvests and favourable rainfall, although livestock and forestry activities remained under pressure.
Manufacturing remained in expansion at 106.4 points, down from 114.1 points in May and 123.6 points in June 2025. While the textile, apparel and footwear segment improved, food, beverage and tobacco, cement, plastics and rubber products, and basic metals recorded weaker performance.
The non-manufacturing sector also returned to expansion with an index of 106.8 points, driven by stronger activity in construction and crude petroleum, although oil and gas services remained in contraction.
By contrast, the services sector contracted, posting an index of 98.5 points as financial institutions, telecommunications, real estate and broadcasting recorded weaker performance. The trade sector remained in expansion at 102.0 points, although wholesale activity slowed and retail trade contracted.
The report attributed the subdued business environment to elevated financing costs, erratic electricity supply, insecurity, infrastructure gaps and regulatory uncertainties, which continued to constrain investment, reduce profit margins and weaken employment growth.
Despite these challenges, businesses expressed stronger optimism about the near-term outlook.
The Future Business Expectation Index rose to 128.4 points in June from 127.0 points in May, reflecting improved confidence over the next one to three months.
NESG said the improved outlook was partly supported by easing geopolitical tensions in the Middle East, which contributed to lower global crude oil prices, averaging $87.7 per barrel in June compared with $112 per barrel in May.
The report comes as Nigeria’s trade sector accounted for 17.89 per cent of the country’s Gross Domestic Product in the first quarter of 2026, underlining its continued importance to economic growth.
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