Business Confidence Holds at 104.6 in June 2026 as High Costs and Weak Credit Bite

Nigeria's business environment stayed in expansion territory in June 2026, but the pace of growth slowed sharply from a year ago as high operating costs, limited credit, and infrastructure problems continued to weigh on firms. The Nigerian Economic Summit Group (NESG) Business Confidence Monitor (BCM) for June showed the Current Business Performance Index unchanged at 104.6 points, the same level as May, but down from 113.6 points in June 2025.

Mixed Sectoral Performance

Manufacturing, agriculture, non-manufacturing, and trade all remained in expansion during the month, but the services sector slipped into contraction. Manufacturing stayed in expansion at 106.4 points, down from 114.1 points in May and 123.6 points a year earlier. Textile, Apparel and Footwear improved, while Food, Beverage and Tobacco, Cement, Plastic and Rubber Products, and Basic Metals recorded weaker performance.

Agriculture returned to expansion as its Business Confidence Index rose to 103.9 points from 97.5 points in May, supported by early harvests and sustained rainfall that boosted crop production. However, livestock and forestry activities remained under pressure. Non-manufacturing moved back into expansion with an index reading of 106.8 points, driven by stronger activity in construction and crude petroleum, although oil and gas services remained in contraction.

The Services sector slipped into contraction with an index of 98.5 points, weighed down by weaker performance across financial institutions, telecoms, real estate and broadcasting. The Trade sector remained in expansion at 102.0 points, although wholesale activity slowed and retail trade contracted.

Key Indicators and Headwinds

Key business indicators including production, demand, operating profit, financial performance, supply orders, cash flow, employment and access to credit remained in expansion. However, investment and exports stayed depressed while trade stockpiling contracted.

NESG noted that businesses continued to face significant headwinds, including limited access to finance, persistent electricity shortages, rising rental costs and insecurity, even as the cost of doing business moderated slightly. Elevated financing costs, erratic electricity supply, infrastructure deficiencies, insecurity and regulatory uncertainties continued to constrain investment, squeeze profit margins and weaken employment growth across sectors.

Outlook Improves on Lower Oil Prices

Despite current operational challenges, Nigerian businesses remain optimistic about short-term economic conditions. The NESG Future Business Expectation Index increased to 128.4 points in June from 127.0 points in May, indicating stronger business confidence over the next one to three months.

NESG attributed the improved outlook partly to 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. Nigeria's economy recorded overall real GDP growth of 3.89% year-on-year in Q1 2026, while the trade sector contributed 17.89% to GDP in the same period.

For Nigerian businesses and consumers, the steady but slower expansion suggests that while the economy is not contracting, the high cost environment and weak credit access continue to limit growth. The improvement in business expectations offers some hope, but sustained relief will depend on addressing infrastructure deficits, improving electricity supply, and easing financing conditions.