NESG Business Index Hits 108.6 As Private Sector Expands

By Johnson Emmanuel

The Nigerian Economic Summit Group (NESG), through its July 2026 Business Confidence Monitor (BCM), reported that Nigeria’s Current Business Performance Index rose to 108.6 points from 105.2 points in June, marking the strongest private sector performance since February 2026. The expansion, recorded across agriculture, manufacturing, non-manufacturing, services and trade, reflected stronger production, demand, profitability, cash flow, employment and credit conditions. The rebound was led by oil and gas services and crude petroleum activities. However, businesses continued to face elevated financing costs following the Central Bank of Nigeria (CBN)’s decision to retain the Monetary Policy Rate (MPR) at 26.5 percent, alongside persistent electricity shortages, infrastructure gaps, insecurity, high logistics expenses and expensive commercial property, all of which continued to constrain productivity and investment.

DECISION HIGHLIGHT

Business activity is expanding faster than operating conditions are improving. The latest data suggest that corporate resilience, rather than structural reform, is sustaining Nigeria’s private sector recovery.

DECISION MEMO

The July BCM indicates that Nigeria’s private sector has entered a phase where growth is increasingly driven by operational adaptation rather than easing business conditions. Expansion across every major sector confirms that firms are finding ways to sustain output despite an environment still characterised by elevated costs and restrictive financing.

The composition of the recovery is equally significant. Agriculture and manufacturing strengthened, services returned to expansion after contracting in June, while non-manufacturing delivered the strongest performance. Together, these point to broader economic participation instead of a recovery concentrated in a single sector.

Yet the report also exposes the limits of current momentum. Higher production has not been matched by a corresponding reduction in structural bottlenecks. High electricity and diesel costs, logistics expenses, weak consumer demand and expensive credit continue to compress margins, particularly for manufacturers and small and medium-sized enterprises.

The resilience of the oil and gas value chain further suggests that sectors benefiting from stronger investment and demand continue to offset weaknesses elsewhere. However, telecommunications and information services slipping into contraction demonstrates that the recovery remains uneven across the economy.

With inflation easing only marginally while interest rates remain elevated, the data imply that businesses are operating in a high-cost equilibrium where expansion is possible but increasingly expensive to sustain.

DATA BOX

• Current Business Performance Index: 108.6 (July 2026), 105.2 (June 2026)
• Highest reading since: February 2026
• Expansion threshold: Above 100 points
• Agriculture: 110.8, from 103.9
• Manufacturing: 110.5, from 106.4
• Non-manufacturing: 116.6, from 106.8
• Services: 108.3, from 98.5
• Trade: 102.8, from 102.0
• Headline inflation (June 2026): 15.91 percent
• Central Bank of Nigeria Monetary Policy Rate: 26.5 percent
• Key constraints: Expensive finance, unreliable electricity, high diesel and logistics costs, infrastructure deficits, insecurity, weak consumer demand, costly commercial property
• Growth driver: Oil and gas services, crude petroleum and natural gas activities

WHO WINS / WHO LOSES

Wins

• Oil and gas operators
• Agriculture producers
• Manufacturers maintaining operational efficiency
• Financial, real estate and professional services firms
• Businesses with strong internal cash generation

Loses

• Small and medium-sized enterprises reliant on bank borrowing
• Energy-intensive manufacturers
• Telecommunications and information services providers
• Businesses exposed to logistics and infrastructure inefficiencies

POLICY SIGNALS

• Business confidence is improving despite unchanged monetary tightening.
• Structural reforms on power, transport and security now matter more than additional macroeconomic stabilisation.
• Sustained private sector expansion will increasingly depend on lowering production costs rather than stimulating demand alone.
• Credit affordability remains a critical constraint to broad-based investment.

INVESTOR SIGNAL

The July data reinforce confidence that corporate activity continues to expand despite restrictive monetary conditions, supporting opportunities in sectors with pricing power and operational resilience. However, businesses with heavy leverage or high energy dependence remain vulnerable until financing costs and infrastructure conditions improve.

RISK RADAR

• Persistently high borrowing costs
• Elevated electricity and diesel expenses
• Weak household consumption
• Infrastructure and logistics constraints
• Insecurity affecting supply chains
• Uneven sectoral recovery, particularly within telecommunications and information services
• Margin compression despite expanding business activity