Businesses Expand Despite Rising Cost Pressures – NESG

Business activity in Nigeria strengthened in July 2026 despite rising operating costs and persistent structural challenges, the Nigerian Economic Summit Group (NESG) has said.

According to its latest Business Confidence Monitor (BCM), the overall Current Business Performance Index rose to 108.6 points in July from 104.6 points in June and 105.4 points in July 2025, reflecting broad based expansion across sectors led by the non-manufacturing sector.

The report, however, noted that businesses continued to face significant cost pressures during the month, with limited access to finance, energy shortages, high rental costs, insecurity and infrastructural challenges remaining the major constraints.

It stated that despite stronger business activity, many firms grappled with rising operating costs, which constrained new investments.

The report noted that key business indicators, including general business situation, production, demand conditions, operating profit, financial results, supply orders, cash flow and employment, remained in the expansion territory in July. However, investment remained in contraction while the access to credit index recorded a marginal decline. Exports and trade stockpiling, on the other hand, expanded during the month.

According to the report, “the index readings for the cost of doing business and input costs rose compared with the previous month.”

It added that, “despite the significant improvement in business activity, many firms grappled with key constraints, including limited financing, inadequate power supply, high property rental costs, insecurity, and infrastructural bottlenecks. These challenges kept operating costs elevated and constrained new investments during the month.”

Looking ahead, the NESG said businesses remained optimistic about conditions over the next one to three months, although the optimism had moderated slightly.

The Future Business Expectations Index stood at 128.3 points in July, marginally lower than 128.4 points recorded in June, reflecting what the report described as “sustained but cautious optimism” about short term business conditions. Trade and manufacturing recorded the strongest optimism during the month.

The report attributed the cautious outlook to concerns over rising cost pressures. “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,” the report stated.