Business activity in Nigeria lost momentum in January 2026 as rising taxes and fuel price adjustments weighed on operations, pushing business confidence to its lowest level in six months, 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 fell to 105.8 points in January from 112.0 points in December 2025. Although the index remained above the 100-point benchmark that signals expansion, the decline reflects a notable slowdown in business conditions at the start of the year.
NESG attributed the weaker performance to mounting cost pressures, subdued consumer demand following the festive season, and the combined effects of new tax measures and higher energy costs on firms across the economy.
Sectoral data revealed a broad-based deceleration in activity. Agriculture and Trade slipped into contraction territory, posting index readings of 99.5 points and 92.7 points respectively, compared with 112.9 points and 123.8 points in December. Manufacturing and Services remained in expansion at 115.8 points and 102.1 points, but both recorded slower growth month-on-month. The Non-manufacturing sector stood out as the only segment that maintained relatively stronger expansionary momentum.
The report noted that all major BCM sub-indices—including general business conditions, production, demand, investment, financial conditions, supply orders, inventory levels, access to credit and cash flow—declined from their December levels. NESG said this moderation reflects a typical post-festive slowdown, exacerbated by persistent structural challenges confronting businesses.
Cost pressures intensified sharply during the period, with the cost of doing business index surging to 90.5 points in January from 54.7 points in December 2025. The input prices index also rose significantly to 96.9 points from 68.9 points. NESG described the environment as a “perfect storm” driven by tax reforms, fuel price adjustments and lingering inflationary effects, which together eroded profit margins and constrained business activity.
Businesses also continued to face limited access to finance, unreliable power supply and rising commercial property costs, factors that dampened investment appetite and weakened overall performance across sectors. According to NESG, these challenges have increased operating risks and reduced firms’ capacity to expand production and employment.
Looking ahead, the Future Business Expectation Index eased to 124.7 points in January from 132.6 points in December, marking the second straight month of declining optimism. Despite this moderation, all sectors remained positive about near-term prospects, though at varying levels.
NESG said sustained implementation of reforms without policy reversals could help improve stability, enabling businesses to build resilience and achieve stronger performance in the months ahead.