Nigeria’s business environment remained in positive territory in March 2026 but recorded a significant decline in momentum, with the Current Business Performance Index dropping to 101.2 points from 117.2 points in February, according to the latest Business Confidence Monitor released by the Nigerian Economic Summit Group. While the reading stays above the 100-point expansion threshold, the sharp fall points to mounting pressure across key sectors of the economy.
Read also: PEBEC halts new government policies to shield businesses from regulatory disruption
What the numbers show
The decline was broad-based. Manufacturing slipped to 103.4 points from 121.1, weighed down by raw material shortages, infrastructure bottlenecks, and constrained access to credit. Trade eased to 103.8 points from 108.7, with wholesale trade sliding into contraction due to supply chain disruptions and financing challenges. Services weakened to 104.7 points.
More concerning, non-manufacturing and agriculture both fell into contraction territory, recording 98.4 and 91.1 points respectively. The agriculture reading in particular signals stress in a sector that many Nigerian SMEs depend on for inputs, raw materials, and rural supply chains.
A fall from 117.2 to 101.2 within a single month is not a subtle shift — it reflects the real and compounding pressure that businesses across Nigeria are dealing with, even as headline figures suggest the economy is still growing.
Read also: IWG, Alternative Bank expand affordable co-working spaces for SMEs
What is driving the slowdown
The NESG identified limited access to finance, frequent power outages, rising input costs, insecurity, and high rental costs as the primary culprits. Rising global oil prices, driven by geopolitical tensions, have also pushed energy costs higher, adding further pressure to businesses already operating on tight margins.
These are not new problems. They are structural constraints that have persistently undermined business performance, and the March data suggests they are intensifying rather than easing despite recent macroeconomic stabilisation efforts.
Read also: Baobab Microfinance Bank opens new Lagos head office to strengthen MSME services
What it means for SMEs
For small businesses, the conditions described in the NESG report translate into a very specific set of challenges: credit that remains expensive or inaccessible, power that disrupts production and forces reliance on costly generators, and operating costs that continue to squeeze margins.
Future business expectations also weakened, falling to 128 points from 135.4 in February, suggesting that business owners themselves are becoming more cautious about the near-term outlook — a signal policymakers should take seriously.
The NESG data reinforces what many entrepreneurs on the ground have been saying for months. The economy may technically be expanding, but the operating environment for small businesses remains genuinely difficult, and the gap between aggregate growth figures and day-to-day business reality is one that policy needs to close.
