Business growth in Nigeria slowed in January 2026, according to the latest Business Confidence Monitor (BCM) report by the Nigerian Economic Summit Group (NESG), which identified rising taxes and fuel price adjustments as key factors affecting commercial activity during the month.
The BCM report, produced jointly by NESG and Stanbic IBTC, showed that overall business confidence in January fell to a six-month low, reflecting weaker performance across multiple sectors compared with December 2025.
The report attributed the slowdown to increased operational costs driven by tax policy implementation and adjustments in fuel prices, alongside lingering inflationary pressures affecting firms nationwide.
NESG’s data indicated that the Current Business Performance Index declined to 105.8 points in January from 112.0 points in December 2025, marking the lowest level recorded in six months.
The index remains above the threshold that indicates expansion but signals moderation in business momentum after the post-festive period.
Rising costs were evident in the Cost of Doing Business Index, which surged to 90.5 points in January from 54.7 points in December, while input price pressures increased to 96.9 points from 68.9 points over the same period, the report showed.
NESG identified new tax reforms and fuel price adjustments as primary drivers of these cost pressures, which squeezed profit margins and constrained operational activities for many firms.
Sector breakdowns revealed that while manufacturing and services remained in expansion territory, growth in trade and agriculture experienced relative softening, with agriculture breaching contraction territory amid weaker performance indicators.
NESG highlighted that rising business costs, coupled with weak post-festive demand, contributed to these sector challenges.
The report also noted constraints such as limited access to finance, unreliable power supply, rising commercial property costs, and infrastructure deficits that continued to affect business sentiment and investment decisions across the economy.
These structural headwinds added to cost pressures and influenced the subdued confidence levels observed in January.
Despite the moderation, overall business activity remained in growth mode, with non-manufacturing sectors such as oil and gas services continuing to expand, while services and trade showed mixed performance, underscoring a nuanced economic outlook.
The NESG report provides a snapshot of early-year business conditions, highlighting cost pressures linked to policy changes and pricing adjustments that influenced operational and investment dynamics in the private sector during January 2026.
