Nigeria's business activity experienced a strong rebound in July 2026. The Nigerian Economic Summit Group (NESG) reported that its Current Business Performance Index climbed to 108.6 points, according to the latest Business Confidence Monitor (BCM).
This reading represents the highest level of business activity recorded since February 2026, when the index reached 117.2 points. Although the July figure remains firmly in expansion territory, it has not yet recovered to the peak seen earlier in the year.
Sectoral Performance Breakdown
The improvement in July was driven by broad-based expansion across major sectors of the economy. The Agriculture index rose to 110.8 points from 103.9 points in June, while the Manufacturing index increased to 110.5 points from 106.4 points.
Non-Manufacturing led the expansion, surging to 116.6 points from 106.8 points in June. The Services sector also returned to expansion territory, rising to 108.3 points from 98.5 points in June and 101.9 points in July 2025.
Trade remained in expansion, with its index rising marginally to 102.8 points from 102.0 points in June, though this was lower than the 103.2 points recorded in July 2025. Key sub-indices such as general business situation, production, demand conditions, operating profit, and cash flow all remained in expansion.
The NESG Future Business Expectation Index, which measures outlook over the next one to three months, stood at 128.3 points in July. This represents a marginal decline from the 128.4 points recorded in June.
Macroeconomic Headwinds and Credit Constraints
Despite the overall expansion, businesses continue to face severe operational challenges. Analysts warn that a sustained recovery in the manufacturing sector remains unlikely unless high production costs, elevated energy prices, and high interest rates are addressed.
Headline inflation eased slightly to 15.91% in June from 15.93% in May, but consumer demand remains weak. The Central Bank of Nigeria (CBN) also retained the Monetary Policy Rate (MPR) at 26.5% in July, keeping financing costs elevated for businesses relying on bank credit.
Furthermore, credit access has tightened significantly. Bank credit to the manufacturing sector declined by N1.92 trillion, falling from N8.53 trillion in December 2024 to N6.61 trillion in December 2025. This credit squeeze occurs even as manufacturing contributed 9.57% to Nigeria's real Gross Domestic Product (GDP) in the first quarter of 2026.
