Nigeria’s private sector recorded its strongest business performance in five months in July, with companies reporting broad-based expansion across key sectors despite persistent challenges of high financing costs, unreliable power supply and infrastructure constraints.

The latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG) yesterday showed that the Current Business Performance Index rose to 108.6 points in July 2026 from 105.2 points in June, representing the highest reading since February.

Although the latest figure remains below the 117.2 points recorded in February, it signalled sustained expansion in business activities as readings above 100 points indicate improving business conditions.

According to the NESG, the improvement reflected stronger performance across all major sectors of the economy, supported by increased production, improved demand conditions, stronger operating profits, healthier cash flow and better employment prospects.

However, businesses continued to grapple with structural constraints, including limited access to finance, inadequate electricity supply, high property rental costs, insecurity and poor transport infrastructure, which continue to weigh on productivity and investment.

The report showed that the agriculture sector improved significantly, with its index rising to 110.8 points in July from 103.9 points in June. Manufacturing also strengthened, climbing to 110.5 points from 106.4 points recorded in the previous month.

The non-manufacturing sector posted the strongest performance among all sectors, rising sharply to 116.6 points from 106.8 points in June.

Similarly, the services sector returned to expansion territory after contracting in June, with its index increasing to 108.3 points from 98.5 points.

The latest reading also surpassed the 101.9 points recorded in July 2025.

Within the services sector, financial institutions, real estate and professional, scientific and technical services maintained positive momentum, while broadcasting rebounded into expansion after recording contraction in June.

However, telecommunications and information services slipped into contraction, while other services hovered around the neutral 100-point mark, suggesting relatively flat business activity.

Trade activities also remained positive, with the sector’s index edging up to 102.8 points from 102 points in June, although the latest figure remained slightly below the 103.2 points recorded in the corresponding period of 2025.

The NESG noted that several key business indicators, including general business conditions, production levels, demand conditions, operating profit, financial performance, supply orders, access to credit, cash flow and employment, remained in expansion territory during the review period.

According to the report, the July performance was largely driven by robust growth in the oil and gas value chain, particularly oil and gas services and crude petroleum and natural gas activities.

Oil and gas services returned to expansion after previous weakness, while crude petroleum and natural gas recorded stronger growth than in June.

Despite the improved business outlook, the report suggests that operating conditions remain challenging for many firms.

Manufacturers continue to struggle with elevated production costs driven by expensive electricity and diesel, high logistics expenses and high cost of borrowing.

Although Nigeria’s headline inflation eased marginally to 15.91 per cent in June 2026 from 15.93 per cent in May, food inflation remained elevated, while businesses continue to report weak consumption, limiting sales growth.

Financing conditions have also remained tight following the decision of the Central Bank of Nigeria (CBN) to retain the monetary policy rate (MPR) at 26.5 per cent in July.

The high interest rate environment has significantly increased borrowing costs for businesses, particularly manufacturers and small and medium-sized enterprises (SMEs) that depend on bank credit for working capital and expansion.

Recent surveys by the Manufacturers Association of Nigeria (MAN) and the Centre for the Promotion of Private Enterprise (CPPE) identified energy costs, exchange rate volatility, infrastructure deficits and access to affordable finance as the biggest constraints facing productive sectors.