Frequent power outages, rising production costs and limited access to credit are holding back manufacturing growth in Nigeria, as businesses struggle to stay afloat amid persistent infrastructure challenges.
This is according to the October 2026 Business Confidence Monitor published by the Nigerian Economic Summit Group.
The report showed that manufacturing stayed in expansion territory in October, but its Current Business Performance Index slipped to 107.3 points from 108.4 points in September and 111.3 points in October 2025, indicating a moderation in business activity.
It listed incessant power outages, inadequate raw material supplies, high rental costs, limited access to credit and infrastructure deficiencies as the major constraints facing manufacturers during the month.
NESG said these challenges continued to push up operating costs, even though business activities across the economy kept expanding.
The effect was most visible in some key manufacturing subsectors. The Textile, Apparel and Footwear subsector fell into contraction territory, with its performance index dropping sharply to 99.7 points in October from 127.5 points in September.
The Cement subsector also stayed in contraction at 94.5 points, while Food, Beverage and Tobacco was the only one of the three major manufacturing subsectors to post improved performance and remain in expansion territory.
The findings highlight the growing burden of unreliable electricity on manufacturers, who need stable power to keep production lines running, process raw materials and maintain factory operations. Frequent outages force businesses to turn to alternative energy sources, which raises production costs and weakens their competitiveness.
At the level of the wider economy, Nigeria’s Current Business Performance Index eased to 115.4 points in October from 117.8 points in September, although it remained above the 111.3 points recorded in October 2025.
All sectors stayed in expansion territory, but only Trade and Services recorded better performance than in the previous month, while Agriculture, Manufacturing and Non-Manufacturing grew more slowly.
The cost pressures also showed in NESG’s business indicators. The cost of doing business sub-index stood at 45.2 points in October, while the prices sub-index was 65.5 points. Both were well below the 100-point neutral threshold, indicating that most firms continued to face high operating costs and producer prices.
Despite these challenges, the Future Business Expectations Index rose to 130.8 points in October from 128.9 points in September, pointing to improved optimism about business conditions over the next one to three months.
Manufacturing recorded an expectations index of 145.1 points, behind Trade at 194 points but ahead of Non-Manufacturing at 135 points.
NESG linked the brighter outlook largely to expectations of stronger consumer demand during the year-end festivities and ongoing campaign activities.
