Nigeria’s business environment remained in expansion territory for the twelfth consecutive month, but momentum slowed in December as firms faced rising costs and policy uncertainty, according to a Business Confidence Monitor released today.
The report shows that while overall activity levels remained positive, business confidence moderated as companies adjusted to higher input costs, energy expenses and borrowing rates. Many firms reported cautious planning for 2026, with some delaying capital expenditure and recruitment decisions.
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Cost pressures intensify
Inflation-driven expenses, currency volatility and increased operating costs continue to weigh on profitability. Businesses cited power costs and logistics expenses as major constraints, particularly for manufacturers and distributors.
Small businesses were found to be more exposed, as limited pricing power restricts their ability to pass costs onto consumers.
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Policy clarity remains critical
Respondents highlighted policy uncertainty as a major concern, especially around taxation, foreign exchange management and import regulations. Analysts warn that inconsistent policy signals could weaken investment sentiment.
Stable and predictable policies were identified as essential to sustaining private-sector growth.
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Implications for 2026
While the expansion streak reflects resilience, economists caution that growth may slow further if cost pressures persist. Improved infrastructure, regulatory clarity and targeted SME support are expected to play a critical role in maintaining momentum.
