•But warns energy prices, credit squeeze threaten outlook
By Babajide Komolafe
Nigeria’s business environment recorded stronger expansion in July 2026 despite rising operating costs, but the Nigerian Economic Summit Group, NESG, has warned that surging energy prices, limited access to credit and other structural constraints could threaten the sustainability of the recovery.
Presenting its August 2026 Business Confidence Monitor, BCM, report, the NESG said: “Nigeria’s business environment recorded stronger expansion in July 2026. The overall Current Business Performance Index stood at 108.6 points, up from 104.6 points in June 2026 and 105.4 points in July 2025. This was driven by broad-based expansion across subsectors led by Non-Manufacturing.”
On the note of caution the group stated: “Key constraints persisted, especially limited access to finance, energy shortages, high rental costs, insecurity, and infrastructural challenges during the month.”
On the outlook for businesses, the report said: “The Future Business Expectations Index stood at 128.3 points in July 2026, declining marginally from 128.4 in the previous month. This reflects sustained but cautious optimism about short-term business conditions.”
According to the NESG, “Sentiment was uneven across sectors, with Trade and Manufacturing recording the strongest optimism during the month. The cautious outlook reflects renewed cost pressures that could result from elevated energy prices in the coming months.”
Explaining the drivers of the positive performance, the report noted: “All sectors except Services remained in the expansion territory. Remarkably, Services moved into the expansion region during the month. Key BCM sub-indices, including general business situation, production, demand conditions, operating profit, financial results, supply order, access to credit, cash flow, and employment, remained in the expansion territory.”
The report added that investment remained weak despite the improved business climate, stressing that: “The access-to-credit index recorded only a marginal decline. Notably, sub-indices including export and trade stockpiling expanded during the month, whereas investment remained in the contraction territory.”
Looking ahead, the NESG warned that: “The cautious optimism signals firms’ concerns over cost pressures that could emanate from the recent shift to dollar-denominated petrol pricing by the Dangote Refinery, which could keep energy prices elevated in the coming months.”
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