Nigeria’s business confidence rose to its strongest level in more than a year in February 2026, driven by expectations of lower borrowing costs and optimism that the ongoing bank recapitalisation programme will strengthen credit availability to businesses.

Data from the Nigerian Economic Summit Group (NESG) Business Confidence Monitor (BCM) shows that the current business performance index rose to 117.2 points in February 2026, up from 105.8 points in January and 111.5 points in February 2025, signalling improved business conditions across the economy.

The report stated that the improvement reflects stronger activity in the manufacturing and non-manufacturing sectors, alongside easing cost pressures and improving demand conditions.

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“Nigeria’s business environment remained in expansion territory in February 2026, with the Current Business Performance Index rising to 117.2 points from 105.8 points in January 2026 and 111.5 points in February 2025, signalling improved business conditions,” NESG disclosed.

The sectoral breakdown indicates that business activities expanded across all five sectors tracked by the index.

Non-manufacturing recorded the strongest performance, rising to 128.9 points from 115.3 points, while manufacturing improved to 121.1 points from 115.8 points.

The services sector increased to 109.2 points from 102.1 points, while trade rebounded strongly to 108.7 points from 92.7 points. Agriculture also moved into expansion territory, rising to 104.8 points from 99.5 points.

Key BCM sub-indices, including general business situation, production, demand conditions, financial conditions, access to credit, cash flow, and employment, remained in expansion territory during the month.

The report added that export activity, supply orders, and trade stockpiling also moved into expansionary territory, reflecting improving demand conditions.

At the same time, cost pressures moderated slightly.

“In the month, the cost of doing business and input prices eased to 65.2 points and 84.3 points, respectively,” the report stated, noting that easing cost pressures alongside strengthening consumer demand supported overall business activity.

Despite the improvement in overall conditions, firms continue to face structural challenges that constrain growth. Businesses cited limited access to financing, irregular electricity supply, rising rental costs, and insecurity as major obstacles to expansion.

Firms expect stronger business conditions ahead

The report also showed strong optimism among businesses about the near-term outlook.

The Future Business Expectations Index, which measures firms’ outlook for the next one to three months, rose to 135.5 points in February, up from 124.7 points in January and 128.3 points in February 2025.

Manufacturing and trade sectors recorded the strongest optimism levels at 164.3 points and 163.1 points, respectively, while non-manufacturing stood at 151.0 points and agriculture at 137.2 points. The services sector recorded the weakest optimism at 117.1 points, though it remained firmly in expansion territory.

The NESG attributed the improved outlook partly to expectations that borrowing costs may ease following the recent monetary policy adjustment.

“Businesses expressed optimism about a potential easing of borrowing costs following the 50 basis-point reduction in the Monetary Policy Rate (MPR) to 26.5 percent at the February 2026 Monetary Policy Committee meeting,” the report stated.

The ongoing recapitalisation of deposit money banks is also supporting confidence.

“The ongoing recapitalisation of deposit money banks, with a March 2026 deadline, is expected to strengthen banks’ balance sheets and support increased lending to critical sectors of the economy,” the NESG said.

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In addition, the report noted that election-related spending could stimulate economic activity across several sectors in the coming months.

However, it warned that excessive fiscal spending could undermine the emerging disinflationary trend and reintroduce cost pressures for businesses.