Nigeria’s Business Environment Shows Moderate Improvement in May 2026
The Nigeria Economic Summit Group’s Business Confidence Monitor (BCM) report indicates that an upswing in the manufacturing, services, and trading sectors contributed to business expansion in May 2026. This positive trend resulted in Nigeria’s Current Performance Index increasing to 104.6 points, up from 102.1 points recorded in April 2026.
Despite this growth, the report highlights ongoing challenges within the business landscape. Factors such as limited access to finance, frequent power outages, rising rental rates, and deteriorating security conditions are collectively constraining business activities.
The BCM report illustrates that while the business environment improved in May, the expansion was described as weak compared to previous years. The index rose from 102.1 points in April to 104.6 points in May. However, this figure represents a significant decline from the 109.8 points noted in May 2025, indicating areas where growth remains stifled.
Sector-Specific Performance and Challenges
Detailed analysis within the report reveals strong performances across various sectors for May 2026. The manufacturing industry made notable gains, entering expansion territory with the index rising from 98.7 points in April to 114.1 points in May. Meanwhile, the services sector also saw improvement, with its index climbing from 101.5 points to 103.5 points, alongside trade, which increased from 102.7 points to 105.5 points.
However, the report also lays bare the adverse economic pressures that businesses are facing. Rising costs and increasing prices for raw materials are continuously impacting profitability. Ongoing issues such as limited access to credit, inadequate electricity supply, elevated office rents, and heightened security risks hinder optimal performance.
Particularly in the manufacturing sector, the expansion was driven by positive results in key subsectors, including food and beverages, textiles, and basic metals. In contrast, sectors such as cement and plastics experienced significant declines, reflecting a mixed and challenging landscape for industry players.
Agricultural Sector Sees Contraction
The agricultural sector’s performance deteriorated, with the NESG BCM index falling to 97.5 points in May 2026 from 103.2 points the previous month. This marked a sharper contraction compared to 98.2 points in May 2025. Business activity declined in crop production and forestry, although livestock exhibited stronger growth. The overall weak performance is attributed to long-standing issues such as security concerns, energy shortages, and infrastructure challenges, all of which increase operational costs.
Non-Manufacturing Sector Faces Decline
In a concerning trend, non-manufacturing activity slipped into contraction territory in May 2026, with the BCM index dropping to 99.4 points from 101.6 points in April. All subsectors, with the exception of construction and crude oil, reported declines. The performance index for non-manufacturing industries underscores the difficulties faced by businesses, which grapple with high rents, frequent power outages, and limited access to credit.
Mixed Outlook for the Services Sector
Despite the challenges faced by non-manufacturing sectors, the services industry remains in an expansionary phase, with the BCM index at 103.5 points, an increase from 101.5 points in April. However, performance varied considerably among subsectors. While real estate and financial services demonstrated solid growth, communication and information services experienced a downturn.
The services sector encounters significant obstacles, including energy shortages, inadequate financing, and regulatory uncertainties, all of which impede new investment initiatives. The fragmented performance indices across subsectors reflect the complex landscape businesses are navigating as they strive for growth amid ongoing socioeconomic challenges.
Trade Sector Maintains Expansion
In contrast, the trade sector sustained its position in the expansion zone, with the BCM index reaching 105.5 points in May, a decline from 114.1 points a year earlier but a rise from 102.7 points in April 2026. This resilience suggests that despite broader economic constraints, the trade sector is adapting and finding avenues for growth in a challenging environment.
