Nigeria’s Business Confidence Slumps in January Amid Rising Costs and Weak Consumer Demand
Nigeria’s business environment faced mounting challenges in January 2026, as rising operational costs and weakening consumer demand slowed economic activity to its lowest level in six months. According to the Nigerian Economic Summit Group (NESG) Business Confidence Monitor released yesterday, the Current Business Performance Index dropped to 105.8 points from 112 points in December 2025, signaling growing unease among business leaders despite remaining above the 100-point expansion threshold.
The report highlights an uneven recovery across sectors. Agriculture, which had recorded strong growth in December, fell below the expansion mark to 99.5 points, while trade experienced a sharp decline from 123.8 points to 92.7 points. Manufacturing and services continued to expand but at slower rates, reflecting broader challenges in sustaining momentum across the economy.
Rising costs emerged as a major concern for businesses. The cost of doing business surged to 90.5 points in January from 54.7 points in December—a 65% increase—driven by a combination of new tax reforms, fuel price adjustments, and lingering inflation. Input prices followed a similar trend, climbing to 96.9 points from 68.9 points, further squeezing margins and forcing companies to balance profitability against declining consumer demand.
All key sub-indices measuring business health—ranging from production and investment to cash flow and access to credit—recorded declines. Structural challenges, such as limited financing options, erratic power supply, and rising commercial property costs, continued to hamper business operations and investment appetite, adding pressure on sectors struggling to maintain performance.
The timing of the downturn raises questions about the short-term impact of recent policy measures on the Nigerian economy. Analysts warn that while the business confidence index remains in expansion territory, the combination of fiscal reforms, fuel price adjustments, and post-festive demand slowdown has created a “perfect storm” that could shape the operating environment for businesses in the coming months.
source: The Guardian