Nigeria’s business environment continued to expand in March 2026 but slowed as rising input costs and power supply deficits weighed on performance, according to the latest Business Confidence Monitor (BCM) report by the Nigerian Economic Summit Group (NESG).
The report indicates that the Current Business Performance Index declined to 101.2 points in March, down from 117.2 points in February and 106.6 points in the same period last year, reflecting weaker momentum across key sectors of the economy.
Despite remaining above the 100-point threshold that signals expansion, the report disclosed that “The decline reveals mounting pressures on businesses, including limited access to finance, frequent power outages, insecurity, and high rental costs, all of which continue to constrain operations.”
A breakdown of sectoral performance highlights uneven trends across the economy. While manufacturing, trade, and services remained in expansion, all three sectors recorded slower growth compared to February.
“Manufacturing activity eased to 103.4 points from 121.1 points, with several sub-sectors such as cement, plastic and rubber products, and wood products slipping into contraction,” the NESG report disclosed.
“The slowdown was attributed to persistent challenges, including raw material shortages, infrastructure bottlenecks, and constrained access to credit, which have raised input costs and squeezed profit margins”.
The services sector posted a weaker expansion at 104.7 points, supported by relatively strong demand and improved financial conditions, but weighed down by rising operating expenses and weak investment momentum.
It added that trade also expanded at 103.8 points, though at a slower pace than in February. Retail activity remained resilient, while wholesale trade slipped into contraction, reflecting supply chain disruptions and financing constraints.
In contrast, non-manufacturing and agriculture recorded outright contractions. The non-manufacturing index fell sharply to 98.4 points from 128.9 points, dragged by weaker performance across oil and gas services and other subsectors.
Agriculture declined further into contraction at 91.1 points, with crop production and livestock activity weakening amid insecurity, financing constraints, and infrastructure challenges that disrupted production and limited investment.
One of the most notable trends in the report is the deepening contraction in investment activity, reflecting heightened risk perception among businesses.
According to the report, firms scaled back commitments to new investments as macroeconomic uncertainties and structural challenges intensified.
High input costs, energy constraints, and insecurity have collectively reduced the appetite for expansion.
Although the overall cost of doing business showed a slight easing to 59.7 percent from 65.2 percent reported in February, input costs remained elevated, continuing to erode profitability and operational efficiency.
Key sub-indices such as export, operating profit, and supply orders also slipped into contraction, further signalling weakening business conditions during the month.
Despite current headwinds, Nigerian businesses remain cautiously optimistic about the near-term outlook.
The Future Business Expectations Index stood at 128.0 points in March, down from 135.4 points in February, indicating softer but still positive expectations over the next one to three months.
The report noted that optimism is strongest in trade and manufacturing, while agriculture and services show weaker confidence levels.
“The outlook is tempered by emerging global risks, particularly rising energy costs linked to geopolitical tensions in the Gulf region, which have pushed oil prices higher and intensified cost pressures for businesses,” NESG said.
