Rising costs of operation slowed Nigeria’s business expansion in January 2026, as new tax reforms, fuel price adjustments, and persistent inflationary pressures strained firms across key sectors, according to the latest Business Confidence Monitor (BCM) from the Nigerian Economic Summit Group (NESG).
The cost of doing business surged to 90.5 points in January from 54.7 points in December, while input prices rose to 96.9 points from 68.9 points.
“These elevated cost pressures are primarily driven by a ‘perfect storm’ of new tax reforms, fuel price adjustments, and the lagged effect of existing inflationary pressures,” the report said.
The NESG-BCM report disclosed that the January index declined to 105.8 points from 112.0 points in December 2025, its lowest level in six months, reflecting weakening activity across most sectors.
“The slowdown reflected the weakening state of business performance, as two sectors (agriculture and trade) fell into the contractionary region,” the report said.
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Agriculture dropped to 99.5 points in January from 112.9 points in December, while trade fell sharply to 92.7 points from 123.8 points, pushing both sectors below the expansion threshold. The declines offset continued growth in manufacturing and services.
Manufacturing eased to 115.8 points from 117.9 points, while services slipped to 102.1 points from 104.3 points, remaining in expansion territory but at weaker levels. The non-manufacturing sector was the only segment that sustained an expansionary trajectory during the month.
The report showed broad-based softening in business conditions, with key sub-indices, including general business situation, production, demand conditions, investment, financial conditions, supply orders, trade stockpiling, access to credit, and cash flow, all falling compared with December.
“This reflects the typical post-festive moderation of business activities amid weak consumer demand,” the NESG said.
According to the NESG, businesses also grappled with limited access to finance, irregular power supply, and rising commercial property costs, which dampened investment and deteriorated business performance across sectors.
Looking ahead, expectations for the next one to three months moderated. The Future Business Expectation Index declined to 124.7 points in January from 132.6 points in December.
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“The sustained optimism, cautious, hinges on a supportive policy environment, currency stability, and stronger export demand, and election-related uncertainties could restrain new investment.
“Manufacturing recorded the strongest outlook among sectors, while agriculture posted the weakest level of confidence in the near term,” the report said.
