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By Chinwendu Obienyi
Businesses continued to grapple with elevated operating costs in October 2026, despite a slight easing in cost and price pressures, as unreliable electricity supply, limited access to credit, insecurity and inadequate infrastructure weighed on business performance.
This is according to the Nigerian Economic Summit Group (NESG) October 2026 Business Confidence Monitor (BCM), which showed that the cost of doing business index stood at 45.2 points, while the prices sub-index recorded 65.5 points, both below the 100-point benchmark separating expansion from contraction.
Although both indices improved from their September levels, their continued position below the neutral threshold indicates that a net majority of businesses were still experiencing elevated operating costs and producer prices.
The report identified irregular electricity supply, limited access to credit, insecurity, high rental costs and inadequate infrastructure as major obstacles confronting businesses across several sectors.
These challenges have continued to increase operational expenses, constrain production capacity and limit the ability of firms to expand their activities.
The pressure on businesses was also reflected in the broader performance index, which declined to 115.4 points in October from 117.8 points in September, indicating a moderation in the pace of economic activity.
However, the latest reading remained above the 100-point threshold, signalling that the private sector continued to expand, albeit at a slower pace. It was also higher than the 111.3 points recorded in October 2025. The report showed that most major business indicators, including production, demand, investment, operating profit, supply orders, cash flow and employment, remained in expansion territory. However, most recorded slower growth compared with the preceding month.
Sectoral performance was mixed, with Trade and Services emerging as the only sectors to record improved performance compared with September.
Trade led the expansion, with its business performance index rising to 136.1 points from 128.5 points in September. Services also improved to 111.9 points from 107.7 points.
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Manufacturing, however, recorded a decline in its index to 107.3 points from 108.4 points, as producers continued to face power outages, raw material shortages, high rental costs, credit constraints and infrastructure deficiencies.
Agriculture also experienced slower growth, with its index falling to 113.8 points from 117.7 points, while Non-Manufacturing declined to 107.7 points from 113.4 points.
The report further indicated that Nigeria’s export activity slipped into contraction during the month, highlighting additional concerns about the external competitiveness of businesses.
Despite the moderation in current business activity, the outlook for the coming months improved.
The NESG Future Business Expectation Index increased to 130.8 points in October from 128.9 points in September, reflecting stronger optimism among businesses about conditions over the next one to three months.
The report attributed the improved outlook partly to expectations of increased consumer spending during the festive season and campaign-related expenditure ahead of the forthcoming general elections.
Trade businesses recorded the strongest optimism, with a future expectation index of 194.0 points, followed by Manufacturing at 145.1 points and Non-Manufacturing at 135.0 points.
Nevertheless, the persistent challenges of high operating costs, unreliable electricity, inadequate infrastructure and limited financing remain significant risks to the sustainability of business expansion in Nigeria.
The Central Bank of Nigeria (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.
