NESG: Power shortages, credit squeeze slow Nigeria’s business activity in October

Nigeria’s business activity expanded at a slower pace in October 2026, with the composite Current Business Performance Index falling to 115.4 points from 117.8 points in September, as firms continued to grapple with power supply problems, limited access to credit and inadequate infrastructure.

The Nigerian Economic Summit Group (NESG) disclosed this in its October 2026 Business Confidence Monitor (BCM), noting that the latest reading remained above the 100-point threshold separating expansion from contraction.

Although activity slowed month-on-month, the index was higher than the 111.3 points recorded in October 2025.

Trade and Services were the only sectors that performed better than in September, while the other three sectors recorded slower growth.

Power and credit constrain business growth

The NESG report showed that most key business indicators remained in expansion territory in October, including production, demand, investment, operating profit, supply orders, cash flow and employment. However, most of these indicators slowed compared with the previous month.

The export sub-index moved into contraction, while the financial results index returned to expansion territory. The cost of doing business and prices sub-indices remained below the neutral 100-point mark at 45.2 and 65.5 points, respectively, indicating that a net majority of businesses continued to report elevated costs and producer prices.

Both readings improved from their September levels, suggesting that cost and price pressures eased slightly but remained significant.

The NESG identified irregular electricity supply, limited access to credit, insecurity, high rental costs and inadequate infrastructure as major constraints affecting businesses. These challenges continued to raise operating costs across several sectors.

Trade and Services record stronger activity

Trade recorded the strongest business performance in October, with its Current Business Performance Index rising to 136.1 points from 128.5 points in September and 115.4 points a year earlier.

Both wholesale and retail trade remained in expansion territory, although retail activity improved more strongly during the month while wholesale trade expanded at a slower pace.

Services also recorded an improvement, with its index rising to 111.9 points from 107.7 points in September and 111.0 points in October 2025.

Broadcasting, Financial Institutions, Professional, Scientific and Technical Services, and Real Estate remained in expansion. The first three subsectors performed better than in September.

However, Telecoms and Information Services moved into contraction after two consecutive months of expansion, while Other Services remained around the neutral threshold.

Despite the improvements, businesses in both sectors continued to face financing constraints, infrastructure gaps and unreliable electricity supply. Services firms also reported regulatory bottlenecks, while traders cited high rental costs and credit constraints.

Manufacturing and agriculture lose momentum

Manufacturing remained in expansion territory, but its Current Business Performance Index declined to 107.3 points in October from 108.4 points in September and 111.3 points a year earlier.

Performance varied across subsectors. Food, Beverage and Tobacco was the only one of the three largest subsectors to remain in expansion and improve on its September performance. Textile, Apparel and Footwear and Cement either moved into or remained in contraction.

Chemical and Pharmaceutical Products, Plastic and Rubber Products, and Wood and Wood Products entered expansion territory. Meanwhile, Pulp, Paper and Paper Products moved into contraction, while Non-Metallic Products remained in contraction.

Manufacturers continued to contend with power outages, shortages of raw materials, high rental costs, limited credit and infrastructure deficiencies.

Agriculture also recorded slower growth, with its index falling to 113.8 points from 117.7 points in September, although it remained above the 111.4 points recorded in October 2025.

Livestock was the only expanding subsector to improve on its previous month’s performance. Crop Production and Agro-Allied recorded slower growth, while Fishing remained in contraction and Forestry stayed around the neutral 100-point mark.

Inadequate financing, energy shortages, insecurity and infrastructure deficits remained major constraints for agricultural businesses.

Non-Manufacturing activity also slowed, with its index declining to 107.7 points from 113.4 points in September and 115.0 points in October 2025. All subsectors except Oil and Gas Services remained in expansion, while Other Non-Manufacturing industries were the only subsector to record a slight improvement from the previous month. Oil and Gas Services remained in contraction for a second consecutive month.

Businesses remain optimistic about outlook

Despite the slower pace of current activity, the NESG Future Business Expectation Index rose to 130.8 points in October from 128.9 points in September, indicating improved optimism about business conditions over the next one to three months.

Trade recorded the strongest outlook at 194.0 points, followed by Manufacturing at 145.1 points and Non-Manufacturing at 135.0 points. Services and Agriculture recorded lower optimism levels of 118.6 and 117.0 points, respectively.

The NESG attributed the improved outlook partly to expectations of stronger consumer demand during the festive season and campaign-related spending ahead of the forthcoming general elections.

Nairametrics earlier reported that Nigeria’s business activity reached a record 117.8 points in September 2026, surpassing the previous high of 117.2 points recorded in February.

Separately, the CBN reported that Nigeria’s private sector sustained its expansion for a fifth consecutive month in October, with the Composite Purchasing Managers’ Index rising to 53.2 points from 53.0 points in September.