NESG says business confidence weakens despite 101.2 expansion in March

Nigeria’s business environment remained in the expansionary zone in March 2026, but with significantly weaker momentum.

This is according to the latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG).

The report showed that the Current Business Performance Index declined to 101.2 points in March from 117.2 points in February 2026.

Despite staying above the 100-point threshold that indicates expansion, the sharp drop highlights mounting pressures across key sectors of the economy.

Compared to the same period in 2025, the index remained slightly lower than the 106.6 points recorded in March last year, suggesting that while growth persists, the pace is weakening amid structural and macroeconomic challenges.

What the report is saying

The NESG report shows a broad-based slowdown across sectors, with only modest expansion recorded in key segments of the economy.

• Manufacturing declined to 103.4 points from 121.1, while Trade eased to 103.8 points from 108.7.
• Services recorded 104.7 points, maintaining expansion but at a slower pace.
• Non-Manufacturing and Agriculture slipped into contraction at 98.4 points and 91.1 points, respectively.

The data indicates that while businesses are still expanding overall, the pace of growth is slowing significantly across multiple sectors.

More Insights

Sectoral performance reveals a fragile and uneven business environment, with several industries facing declining output and demand pressures.

• In manufacturing, only sub-sectors such as food and beverages, metals, and pharmaceuticals sustained growth, while cement, plastics, and paper products contracted.
• Trade sector performance was supported by retail activity, but wholesale trade dipped into contraction, reflecting weak distribution and demand uncertainty.
• Services maintained broad-based growth across financial services, real estate, and professional services, though rising operating costs weighed on performance.
• Agriculture recorded the sharpest decline, driven by reduced crop production and livestock activities, while forestry stagnated.

Across sectors, businesses faced persistent challenges, including limited access to financing, erratic power supply, rising rental costs, input shortages, and insecurity, all of which continue to constrain productivity and investment.

The report highlights growing concerns about weakening investment sentiment and future economic growth prospects.

• The investment sub-index remained in contraction, signalling reduced willingness by businesses to commit capital due to rising risks and uncertainty.
• Key indicators such as export activity, operating profits, and supply orders also slipped into contraction, pointing to declining competitiveness and profitability.
• The Future Business Expectation Index dropped to 128.0 points from 135.4 points, indicating cautious optimism for the next one to three months.
• Sectoral expectations were strongest in Trade (160.5 points) and Manufacturing (155.3 points), while Agriculture and Services showed weaker optimism.
• “Overall, the Trade sector’s continued expansion was driven by improved stockpiling and stronger cash flow conditions. However, businesses still faced significant challenges, including limited access to finance, insecurity, and unreliable power supply. These constraints disrupted supply chains and weakened firms’ willingness to commit to new investments,” the report noted.

The NESG noted that rising global oil prices, driven by geopolitical tensions, are increasing energy costs and further shaping cautious business sentiment.

What you should know

Recently, the Central Bank of Nigeria (CBN) reported that Nigeria’s composite Purchasing Managers’ Index (PMI) recorded at 53.2 points in March.

Despite the sustained expansion, the pace of growth showed signs of moderation, pointing to persistent macroeconomic pressures.

Nairametrics reported that PMI climbed to 56.4 points in February 2026, showing 15 consecutive months of expansion.