Power crisis, credit squeeze slow Nigeria’s business growth to 11

Nigeria’s business activity lost momentum in October 2026 as unreliable electricity supply, restricted access to credit and infrastructure deficiencies continued to drive up operating costs, weakening expansion across three of the economy’s five major sectors.

The composite Current Business Performance Index declined to 115.4 points in October from 117.8 points in September, representing a 2.4-point moderation in business activity, according to the Nigerian Economic Summit Group’s (NESG) October 2026 Business Confidence Monitor (BCM).

Although the index remained above the 100-point threshold separating expansion from contraction, the decline highlights persistent structural constraints confronting businesses despite improvements in overall economic activity.

The October reading, however, remained stronger than the 111.3 points recorded in the corresponding period of 2025, suggesting that businesses were still operating at a higher level of activity than a year earlier.

The NESG reported that Trade and Services were the only sectors to record improved performance compared with September, while Manufacturing, Agriculture and Non-Manufacturing experienced slower expansion.

Most key business indicators, including production, demand, investment, operating profit, supply orders, cash flow and employment, remained in expansion territory, although their growth momentum weakened during the month.

The export sub-index, however, slipped into contraction, while the financial results index returned to expansion territory.

The cost of doing business and prices sub-indices remained significantly below the neutral threshold, at 45.2 and 65.5 points, respectively, indicating that a net majority of businesses continued to experience elevated operating costs and producer prices.

Although both indicators improved from their September readings, the figures suggest that cost pressures remain a major obstacle to business profitability and investment.

The NESG identified irregular electricity supply, limited access to credit, insecurity, high rental costs and inadequate infrastructure as major constraints affecting businesses across the economy.

Trade emerged as the strongest-performing sector, with its Current Business Performance Index rising to 136.1 points in October from 128.5 points in September and 115.4 points in October 2025.

Both wholesale and retail trade remained in expansion territory, although retail activity recorded greater improvement during the month, while wholesale trade expanded at a slower pace.

The Services sector also improved, with its index increasing to 111.9 points from 107.7 points in September and 111.0 points in the corresponding period of 2025.

Broadcasting, Financial Institutions, Professional, Scientific and Technical Services, and Real Estate remained in expansion, with the first three subsectors recording improved performance compared with September.

However, Telecommunications and Information Services slipped into contraction after two consecutive months of expansion, while Other Services remained around the neutral threshold.

Despite the stronger performance in Trade and Services, businesses in both sectors continued to contend with financing constraints, unreliable electricity and infrastructure deficiencies. Services operators also reported regulatory bottlenecks, while traders highlighted high rental costs and restricted access to credit.

Manufacturing activity also weakened, with its Current Business Performance Index declining to 107.3 points in October from 108.4 points in September and 111.3 points a year earlier.

The sector’s performance varied across subsectors, with Food, Beverage and Tobacco emerging as the only one among the three largest manufacturing subsectors to remain in expansion and improve on its September performance.

Textile, Apparel and Footwear and Cement either moved into or remained in contraction, reflecting continuing pressures on production and industrial operations.

Chemical and Pharmaceutical Products, Plastic and Rubber Products, and Wood and Wood Products moved into expansion territory, while Pulp, Paper and Paper Products slipped into contraction. Non-Metallic Products also remained in contraction.

Manufacturers continued to face power outages, raw material shortages, high rental costs, limited access to credit and infrastructure deficiencies, factors that have continued to undermine production efficiency and operating margins.

Agriculture recorded a similar slowdown, with its index falling to 113.8 points in October from 117.7 points in September, although it remained above the 111.4 points recorded a year earlier.

Livestock was the only expanding agricultural subsector to improve on its previous month’s performance, while Crop Production and Agro-Allied recorded slower growth.

Fishing remained in contraction, while Forestry hovered around the neutral 100-point threshold.

The NESG identified inadequate financing, energy shortages, insecurity and infrastructure deficits as major constraints affecting agricultural businesses, highlighting the challenges facing efforts to strengthen domestic food production and agricultural value chains.

Non-Manufacturing activity also moderated, with its index declining to 107.7 points from 113.4 points in September and 115.0 points in October 2025.

All subsectors, except Oil and Gas Services, remained in expansion, while Other Non-Manufacturing industries recorded the only slight improvement in performance compared with the preceding month. Oil and Gas Services remained in contraction for the second consecutive month.

Despite the slowdown in current business conditions, the outlook for the coming months improved, with the NESG Future Business Expectation Index rising to 130.8 points in October from 128.9 points in September.

Trade recorded the strongest business outlook at 194.0 points, followed by Manufacturing at 145.1 points and Non-Manufacturing at 135.0 points. Services and Agriculture recorded lower expectations of 118.6 and 117.0 points, respectively.

The improved sentiment was attributed partly to expectations of stronger consumer demand during the festive season and increased campaign-related spending ahead of the forthcoming general elections.

The October reading followed a record performance in September, when Nigeria’s business activity index reached 117.8 points, surpassing the previous high of 117.2 points recorded in February.