Nigeria’s business environment recorded slower growth in March 2026 as rising input costs and weak investment sentiment softened overall performance, according to the latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG) in collaboration with Stanbic IBTC Holdings Plc.
The April 2026 report showed that while business activity remained in expansion territory, momentum weakened significantly during the month. The Current Business Performance Index declined to 101.2 points, down from 117.2 points in February and 106.6 points recorded in March 2025.
The BCM, which tracks business sentiment and short-term economic expectations, indicated that the slower pace of expansion reflects mounting operational challenges across key sectors of the economy.
A breakdown of the data revealed uneven performance across sectors. Manufacturing, Trade, and Services remained in expansion but recorded notable slowdowns. Manufacturing dropped to 103.4 points from 121.1, Trade eased to 103.8 from 108.7, while Services declined to 104.7 from 109.2.
More concerning, however, was the shift into contraction territory for Non-Manufacturing and Agriculture.
The Non-Manufacturing index fell sharply to 98.4 points from 128.9, while Agriculture dropped to 91.1 points from 104.8, underscoring deepening vulnerabilities in critical segments of the economy.
Analysts say the contraction in agriculture, in particular, raises food security concerns and could further intensify inflationary pressures.
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The report attributed the weak performance to persistent structural challenges, including limited access to finance, frequent power outages, insecurity, and rising rental costs.
Businesses also faced escalating input costs, especially energy and logistics expenses, which have been exacerbated by global oil market volatility and domestic supply constraints.
These pressures have combined to erode profit margins and dampen expansion plans, particularly among small and medium-sized enterprises.
Despite the current slowdown, businesses remain cautiously optimistic about the near-term outlook. The Future Business Expectations Index stood at 128.0 points in March, though lower than 135.4 points recorded in February.
According to the report, Trade and Manufacturing sectors expressed the strongest optimism for the next one to three months, while other sectors showed more subdued expectations.
The cautious outlook reflects uncertainty around rising energy costs linked to geopolitical tensions in the Gulf region, as well as concerns over domestic macroeconomic stability.
Economists note that weak investment remains a critical drag on business performance. With financing constraints and high operating costs persisting, many firms are delaying capital expenditure and expansion decisions.
This trend, if sustained, could limit job creation and slow the pace of economic recovery.
The NESG and Stanbic IBTC emphasised the need for targeted policy interventions to ease business constraints, stabilise input costs, and improve access to finance.
They noted that while Nigeria’s business environment remains technically in expansion mode, the quality of that growth is weakening — a trend that policymakers must address to sustain economic momentum.
As cost pressures mount and investment appetite remains fragile, the report underscores a growing concern within the private sector: that without structural reforms, Nigeria’s growth trajectory may continue to lose steam despite positive headline indicators.
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