NESG: Mixed picture on business confidence

Nigeria’s business environment extended its expansion streak into a twelfth consecutive month in December 2025, although rising uncertainty and mounting structural constraints softened the pace of growth, according to the latest Business Confidence Monitor released by the Nigerian Economic Summit Group (NESG).

The report, titled “Rising Uncertainty Dampens Nigeria’s Current Business Conditions,” showed that the Current Business Performance Index moderated to 112.0 points in December from 113.3 points in November, but remained firmly above the expansion threshold and stood 11.2 points higher than its level a year earlier.

 NESG said the outcome confirmed that “Nigeria’s business environment sustained its 12-month consecutive expansion streak, although the Current Business Performance Index moderated slightly in December 2025.”

Despite the expansion,  the group said businesses faced what the report described as “binding constraints,” including limited access to finance, inadequate power supply, policy uncertainty, high rental costs and persistent exchange-rate pressures.

These factors, NESG noted, combined to dampen confidence and slow activity across several sectors even as overall performance stayed positive.

Agriculture ,it noted ,emerged as the standout performer, with its business performance index rising sharply by 9.6 points to 112.9, driven by seasonal sales and stronger activity in crop production, livestock and agro-allied segments. The report observed that the rebound reflected “heightened business activities within key food-producing segments and underscores the high seasonal demand for agricultural output in this period of the year.”

According to it, manufacturing also recorded a modest improvement, climbing to 117.9 points, supported by food and beverages, textiles, plastics, paper products and electricals. However, NESG cautioned that manufacturers continued to grapple with “inadequate electricity supply, persistent insecurity, shortages of raw materials, rising input prices, and weakening sales,” challenges that were eroding margins and constraining investment.

By contrast, Trade, Services and Non-Manufacturing sectors all saw slower momentum compared with November. Trade remained the most upbeat in absolute terms at 123.8 points, but the index eased as “weak consumer demand and cautious spending dampened business performance during the month,” despite seasonal sales.

 Services slipped for a second straight month to 104.3 points, reflecting weaker activity in broadcasting, real estate and professional services, while Non-Manufacturing moderated to 110.2 points amid lingering structural bottlenecks.

Key sub-indices such as production, demand conditions, supply orders, access to credit and cash flow all recorded moderate declines, pointing to what NESG described as “a more cautious business stance and subdued consumer demand.” At the same time, the cost of doing business climbed sharply to 61.6 points from 54.3 in November, underscoring the pressure from rising operating expenses.

Looking ahead, it indicated that optimism about near-term conditions remained intact but softened.

The Future Business Expectation Index dipped to 132.6 points from 134.8, still above its December 2024 level.

NESG said the outlook reflected “uncertainty around anticipated policy reforms, a less supportive operating climate, and negative spillovers from electoral developments,” even as higher production levels and improved supply orders offered some offset.

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According to it,trade recorded the highest future optimism, followed by manufacturing, while services posted the weakest expectations.

Overall, the report concluded that cautious optimism persists, supported by seasonal activity, relative exchange-rate stability and infrastructure investment, but warned that sustaining momentum would depend on tackling long-standing constraints that continue to weigh on the  business climate.