Nigeria’s economy expanded in May as stronger consumer spending linked to festive activities helped sustain business growth despite high operating costs, limited access to credit, insecurity and inadequate power supply.
According to the Nigerian Economic Summit Group (NESG), the Current Business Performance Index rose to 104.6 points in May 2026 from 102.1 points in April, indicating an improvement in business conditions across key sectors of the economy. However, the index remained below the 109.8 points recorded in the corresponding period of 2025.
The report noted that the month-on-month improvement was largely driven by stronger performances in manufacturing, services and trade.
“Nonetheless, the month-on-month uptick in the index was driven by improved performances in Manufacturing, Services, and Trade,” the NESG stated.
The development points to growing economic activity despite a challenging operating environment that continues to weigh on businesses nationwide.
Manufacturing recorded the strongest rebound, moving into expansion territory with an index score of 114.1 points from 98.7 points in April. Trade activity also strengthened to 105.5 points from 102.7 points, while services improved to 103.5 points from 101.5 points.
The report attributed much of the improvement to stronger consumer demand.
“Notably, robust demand conditions largely reflect festivity-induced consumer spending,” the NESG said.
The trade sector was among the biggest beneficiaries of the increased spending. According to the report, stronger consumer demand led to increased inventory accumulation, supply orders and fresh investments.
“Nonetheless, the sector benefited strongly from festivity-induced consumer demand, resulting in higher trade stockpiling, supply orders, and new investments during the month,” the report stated.
Manufacturers also benefited from improved market demand, particularly in consumer-facing industries.
“The sector benefited from strong consumer demand during the festive period,” the report noted, although it added that firms continued to face constraints including limited access to credit, irregular power supply, raw material shortages and inadequate infrastructure.
Despite the positive growth signals, businesses continued to grapple with significant structural challenges.
The NESG observed that “business activity was constrained by limited access to finance, incessant power outages, elevated rental costs, and persistent insecurity during the month.”
These constraints were evident across sectors. Agriculture slipped into contraction territory with an index score of 97.5 points from 103.2 points in April, reflecting the impact of insecurity, energy shortages and poor infrastructure on farm-related activities. Non-manufacturing industries also contracted, posting an index score of 99.4 points compared to 101.6 points in the preceding month.
While current conditions improved, businesses maintained a cautiously optimistic outlook for the months ahead.
The Future Business Expectations Index stood at 127 points in May, slightly lower than 128.6 points in April but firmly above the 100-point threshold that indicates optimism.
According to the NESG, optimism remains supported by anticipated spending associated with political campaigns and seasonal agricultural activities.
“The overall positive outlook could be linked to electioneering campaign-induced demand and the early crop harvest season,” the report stated.
Further reinforcing this outlook, the NESG said that “the overall positive outlook reflects the early crop harvest season around June to August and strong demand prospects associated with the forthcoming electioneering campaigns.”
Manufacturing businesses expressed the highest level of optimism about future conditions with an expectations index of 160.4 points, followed by trade at 140.8 points and agriculture at 137.7 points. Services recorded the lowest level of optimism at 111.8 points.