Rising business costs drag confidence despite expansionary growth – NESG

The cost of doing business in Africa’s most populous economy has risen to 61.6 points in December, thereby dampening business confidence during the period, a new report disclosed.

The Business Confidence Monitor (BCM) report released by the Nigerian Economic Summit Group (NESG) disclosed that this increase, alongside elevated input prices, contributed to the relative slowdown in business performance in the month.

“Businesses continued to grapple with persistent financing constraints, unreliable power supply, policy uncertainty, high commercial property costs, and elevated exchange rate pressures, all of which remained the most significant challenges, dampening business performance and confidence during the month,” it said.

The report disclosed that Nigeria’s business confidence softened in December 2025 as rising operating costs weighed heavily on firms, despite the economy sustaining an expansionary streak for the twelfth consecutive month.

It said the current business performance index eased to 112.0 points in December 2025, down from 113.3 points in November, reflecting a moderation in business activities across sectors.

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Although the index remained firmly above the 100-point expansion threshold, the slowdown highlighted growing pressures within the operating environment.

“The moderation in the pace of expansion reflects a general softening in business activities across sectors,” the report noted

Sectoral data showed that while all five major sectors stayed in expansionary territory, three recorded declines compared with November.

“The services sector weakened to 104.3 points, while trade slowed to 123.8 points amid weak consumer demand and cautious spending. The non-manufacturing sector also moderated to 110.2 points, with NESG attributing the slowdown to persistent structural constraints – insecurity, inadequate infrastructure, high rental costs, limited access to finance, multiple taxation, and rising operating expenses.”

In contrast, agriculture emerged as the top spot, rising to 112.9 points on the back of seasonal demand and improved activity in crop production, livestock, and agro-allied sub-sectors.

Manufacturing also improved marginally to 117.9 points, supported by strong performance in food, beverages, textiles, and plastics, even as firms reported that activities remain constrained by inadequate electricity supply, persistent insecurity, shortages of raw materials, rising input prices, and weakening sales.

The NESG Future Business Expectation Index declined to 132.6 points in December from 134.8 points in November, reflecting uncertainty surrounding anticipated policy reforms, a less supportive operating climate, and negative spillovers from electoral developments.

Chinwe Michael is a financial inclusion advocate and economy journalist who uses compelling storytelling to drive awareness. With a background in Banking and Finance and experience across accounting, media, and education, she applies sharp analysis and attention to detail to every piece. She simplifies complex financial and economy concepts into engaging content for Africa and global audience. Chinwe also doubles as a speaker with global recognition for her expertise.

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