NESG report shows broad-based expansion across key sectors in July, but high borrowing costs, poor power supply and infrastructure gaps continue to weigh on businesses…..
Business activity in Nigeria gathered fresh momentum in July 2026, with companies across several sectors reporting stronger operating conditions despite persistent economic headwinds.
The latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG) shows the Current Business Performance Index climbed to 108.6 points in July, representing the strongest reading since February and signaling continued expansion in private sector activity.
Although the latest figure remains below the 117.2 points recorded in February, it reflects renewed optimism among businesses after months of mixed economic conditions.
Virtually every major sector recorded stronger performance during the month, highlighting a broad-based recovery in business activity.
Agriculture posted a notable improvement, with its index rising to 110.8 points from 103.9 in June. Manufacturing also strengthened, increasing from 106.4 to 110.5 points, while the non-manufacturing sector delivered the strongest performance, jumping to 116.6 points from 106.8.
The services sector also returned firmly to expansion after slipping below the growth threshold in June. Its index rose to 108.3 points, up from 98.5, reflecting improved activity across several service-based industries.
Trade maintained its expansionary trend, although growth remained modest. The sector’s index edged higher to 102.8 points, compared with 102.0 in June.
According to the NESG, the improvement was largely driven by stronger activity in the oil and gas value chain.
Oil and Gas Services returned to expansion during the month, while Crude Petroleum and Natural Gas recorded even stronger growth than in June, providing additional support for overall business activity.
Within the services sector, Financial Institutions, Real Estate, and Professional, Scientific and Technical Services all maintained positive momentum. Broadcasting also rebounded after contracting in the previous month.
However, not every industry shared in the gains. Telecommunications and Information Services slipped into contraction, while Other Services hovered around the neutral 100-point mark.
Businesses also expressed confidence that the positive momentum could continue over the coming months.
The NESG’s Future Business Expectation Index stood at 128.3 points in July, only slightly below the 128.4 points recorded in June, suggesting that most firms remain optimistic about business conditions over the next one to three months.
Despite the stronger performance, businesses say several structural issues continue to constrain operations.
Limited access to finance, unreliable electricity supply, high commercial rental costs, insecurity and inadequate infrastructure remain some of the biggest obstacles facing firms across the country.
Several key business indicators including production levels, operating profits, demand conditions, employment, cash flow, financial performance and access to credit remained in expansion territory, but businesses warned that sustaining growth will require improvements in the operating environment.
Industry analysts caution that Nigeria’s manufacturing sector could struggle to sustain its recovery unless production costs begin to ease.
Although headline inflation slowed marginally to 15.91% in June from 15.93% in May, manufacturers continue to grapple with expensive energy, elevated borrowing costs and subdued consumer demand.
Financing conditions also remain tight after the Central Bank of Nigeria retained the Monetary Policy Rate (MPR) at 26.5% in July, keeping lending rates high for businesses seeking capital for expansion.
Concerns have also grown over declining access to credit. Bank lending to manufacturers dropped by ₦1.92 trillion, falling from ₦8.53 trillion in December 2024 to ₦6.61 trillion by December 2025.
The latest NESG figures add to recent signs that Nigeria’s private sector continues to recover gradually. The country recorded its fifth consecutive month of private-sector expansion in June, supported by stronger customer demand and new product offerings.
Meanwhile, data from the National Bureau of Statistics shows manufacturing accounted for 9.57% of Nigeria’s real Gross Domestic Product (GDP) in the first quarter of 2026.
While July’s performance offers another encouraging signal for the economy, businesses say meaningful and sustained growth will ultimately depend on lower financing costs, improved infrastructure, stable power supply and policies that reduce the cost of doing business.
