Nigeria’s private sector showed signs of recovery in February 2026, but key obstacles are still slowing growth, according to the Nigerian Economic Summit Group (NESG).
The group revealed this in its latest Business Confidence Monitor (BCM) report released on Wednesday, March 4.
The report shows the Business Performance Index hit 117.2 points, its highest in over a year, as all five major sectors—non-manufacturing, manufacturing, services, trade, and agriculture—recorded expansion.
However, the NESG said businesses are still operating in a “high-friction” environment. A major concern the group highlighted is the investment deficit.
It indicates that while the investment index improved from January, it remains in contraction, signalling that firms are still cautious about committing long-term capital amid a volatile economy and high expansion costs.
Structural challenges, including irregular electricity supply, force companies to rely on costly self-generation, while rising rental and property costs tighten cash flow.
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The report also shows that access to affordable, long-term financing remains limited, even though some improvements in credit and cash flow were recorded.
Insecurity also continues to disrupt business operations, affecting supply chains, raising insurance costs, and discouraging domestic and foreign investment.
“Despite these broad-based gains, businesses continued to face challenges, including limited financing, irregular electricity supply, rising rental and property costs, and insecurity,” NESG stated.
It stressed that the cost of doing business remains high, with input prices at 84.3 points and a cost-of-doing-business index at 65.2 points, putting pressure on profit margins.
The report notes that agriculture and trade, though now in expansionary territory with indices of 104.8 and 108.7 points, are particularly vulnerable to high costs, unlike non-manufacturing, which recorded 128.9 points and manufacturing with 121.1 points and enjoyed more buffer.
NESG says the recovery is being supported by easing cost pressures and stronger consumer demand, allowing firms to operate more actively.
However, for long-term growth, it warns that Nigeria must tackle poor infrastructure, insecurity, limited financing, and rising fixed costs.
Without addressing these structural “anchors,” short-term gains may not lead to sustained investment and industrial expansion.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
