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As Business Confidence drops to 6-month low
By Babajide Komolafe
Rising taxes and fuel price adjustments slowed the pace of business growth in Nigeria in January 2026, pushing business confidence to a six-month low, according to the latest Business Confidence Monitor (BCM) report released by the Nigerian Economic Summit Group (NESG).
The report showed that the Current Business Performance Index declined to 105.8 points in January from 112.0 points in December 2025, marking its weakest level in the past six months, though it remained above the 100-point threshold that separates expansion from contraction.
NESG attributed the slowdown to heightened cost pressures, weak post-festive consumer demand and the combined impact of new tax measures and higher energy costs on business operations.
A sectoral analysis indicated that business activity weakened across most segments of the economy. Agriculture and Trade slipped into contraction territory, recording 99.5 points and 92.7 points respectively, down sharply from 112.9 points and 123.8 points in December. Manufacturing and Services remained in expansion at 115.8 points and 102.1 points, but both posted weaker growth compared with the previous month, while the Non-manufacturing sector emerged as the only segment that sustained a relatively stronger expansionary momentum.
NESG noted that all major BCM sub-indices—including general business situation, production, demand conditions, investment, financial conditions, supply orders, trade stockpiling, access to credit and cash flow—declined compared with December 2025.
This broad-based moderation, the NESG said, reflected a typical slowdown after the festive season, compounded by persistent structural challenges facing businesses.
Cost pressures intensified significantly during the period under review, with the cost of doing business index surging to 90.5 points in January from 54.7 points in December 2025. Similarly, the input prices index jumped to 96.9 points, up from 68.9 points in the previous month. NESG described the situation as a “perfect storm” driven by new tax reforms, fuel price adjustments and the lagged effects of inflation, all of which eroded margins and constrained business activity.
According to the report, businesses continued to grapple with limited access to finance, irregular power supply and rising commercial property costs, factors that dampened investment decisions and weighed on overall performance across sectors. These challenges, NESG said, have heightened operating risks and reduced firms’ capacity to expand production and employment.
Meanwhile, the Future Business Expectation Index, which measures near-term business outlook over one to three months, moderated to 124.7 points in January from 132.6 points in December 2025, marking the second consecutive month of declining confidence. Despite the slowdown, all sectors remained optimistic about future conditions, albeit at varying degrees.
The NESG added that if the government sustains its reform agenda without policy reversals, Nigerian businesses would be better positioned to leverage stability for growth, resilience and improved performance in the months ahead.