Nigeria has now recorded 12 straight months of business expansion, but the latest data suggests that growth is continuing more out of persistence than confidence. The economy is still moving forward, yet many businesses are doing so carefully, adjusting their expectations as costs rise and consumer demand weakens.

This picture emerges from the December 2025 Business Confidence Monitor released by the Nigerian Economic Summit Group in partnership with Stanbic IBTC. While the headline numbers confirm that business activity remains in expansionary territory, the details reveal an economy that is holding its balance rather than accelerating.

The Current Business Performance Index slipped slightly to 112.0 points in December from 113.3 points in November. Although the index remained higher than its December 2024 level, the month-on-month decline reflects growing caution across sectors. Businesses are still operating, but fewer are confident enough to push aggressively.

What makes this moment notable is not that growth slowed, but that it slowed after a full year of steady expansion. After 12 consecutive months of positive momentum, the expectation might have been a stronger finish to the year. Instead, rising operating costs and softer consumer demand appear to be reshaping business behaviour.

Across the economy, activity remains uneven. Agriculture emerged as the strongest performing sector in December, supported by seasonal demand and improved output across crop production, livestock, and agro-allied activities. Better harvests, improved access to inputs, and increased mechanisation contributed to the sector’s rebound, allowing parts of agriculture to move firmly back into expansion.

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Manufacturing also recorded modest improvement, driven largely by food processing, beverages, textiles, plastics, and electronics. These gains reflect demand for essential goods rather than discretionary spending. At the same time, structural weaknesses remain evident. Cement, basic metals, iron and steel, and wood products slipped into contraction, highlighting the persistent impact of energy costs, raw material shortages, and infrastructure gaps.

Trade, services, and non-manufacturing sectors continued to expand, but at a slower pace. In trade, festive season sales provided some lift, yet weak consumer purchasing power limited broader momentum. Many businesses reported that customers were buying less or trading down, even when foot traffic remained steady.

Services recorded its second consecutive slowdown, weighed down by weaker performance in real estate, telecommunications, broadcasting, and professional services. High operating costs, unreliable infrastructure, insecurity, and limited access to finance continue to restrict growth in sectors that typically benefit from economic recovery.

One of the clearest signals from the report is the pressure businesses face on costs. The cost of doing business index rose sharply to 61.6 points in December from 54.3 points in November. Electricity challenges, rising input prices, logistics costs, and currency-related pressures are forcing businesses to rethink expansion plans, staffing decisions, and pricing strategies.

Sub-indices covering production, supply orders, credit access, cash flow, and financial conditions all recorded moderate declines. This suggests that while businesses are still operating, many are choosing caution over expansion, preserving liquidity and limiting exposure in an uncertain environment.

Looking ahead, optimism has not disappeared, but it has become more measured. The Future Business Expectation Index dipped slightly to 132.6 points, remaining above its December 2024 level. Businesses still expect gradual improvement, but concerns around policy consistency, operating conditions, and broader economic risks are shaping expectations for 2026.

Supporting data from the Central Bank of Nigeria adds another layer to the story. The Composite Purchasing Managers’ Index rose to 57.6 points in December, indicating the fastest private sector expansion recorded in 2025. Input cost inflation also eased to its weakest rate in nearly five years, offering some relief to businesses struggling with cost pressures.

Taken together, the data points to an economy that is expanding, but carefully. Nigeria’s private sector has shown resilience over the past year, yet sustaining growth will depend on addressing long-standing structural challenges. Without improvements in infrastructure, power supply, access to finance, and policy clarity, expansion risks become fragile rather than transformative.

For now, Nigerian businesses are still moving forward. They are simply doing so with their eyes wide open, aware that growth alone does not guarantee stability.

Cynthia Nwanonyiri