In 2026, Nigeria’s private sector is showing improving macroeconomic signals despite rising operational and market risks, the Nigeria Private Sector Outlook 2026 released by the Nigerian Economic Summit Group (NESG) disclosed.
The report shows that reforms stabilised key indicators in 2025, with real GDP growth at 3.9 percent, inflation easing, and exchange rate conditions narrowing. However, this shift has not translated into broad-based gains for businesses, leaving firms to navigate a mix of opportunity and pressure in 2026.
“Macroeconomic stabilisation has laid a foundation, but progress now depends on firm-level choices,” the report stated.
The outlook identifies demographics, digital adoption, and regional trade as key drivers of growth for 2026. The expanding population and changing demand patterns continue to support consumption, while digital tools enable firms to adapt their operations and reach new markets.
Services such as ICT and finance, which drove a large share of growth in 2025, are expected to remain central to expansion. The report also points to supply chain adjustments and local production as areas where firms can unlock productivity gains.
Read also: FG pushes new policy model to drive growth through private sector
At the firm level, businesses that invest in energy alternatives, workforce skills, and technology are positioned to capture emerging demand and improve output.
Despite these opportunities, the risk landscape is shifting from macroeconomic instability to market-driven pressures. The NESG Enterprise Risk Survey shows that demand-side challenges are intensifying, with weak consumer purchasing power affecting sales.
“Retaining customers is becoming more difficult, as weak purchasing power continues to shape demand,” the report noted.
Competition is also rising, especially from lower-cost and agile firms, forcing companies to adjust pricing and value propositions. This trend is expected to define business strategy in 2026.
Cost pressures persist across sectors
Structural constraints remain a major risk to productivity. Energy supply continues to limit output, with firms operating below capacity due to grid instability and reliance on alternative power sources.
Read also: Nigeria’s economic growth must be driven by private sector, Uzoka-Anite says
Manufacturers, for instance, operated at 55–65 percent of installed capacity in 2025 due to power shortages and high diesel costs.
Access to finance is another constraint. High interest rates and cautious lending reduced private sector credit, limiting investment and expansion, particularly for small businesses.
The report also highlights infrastructure gaps, insecurity, and rising operating costs as ongoing pressures affecting production and margins.
Beyond traditional constraints, new risks are gaining prominence. Talent shortages are becoming more pronounced across sectors, affecting productivity and execution capacity.
At the same time, cybersecurity risks are increasing as businesses digitise operations. The report identifies this as a critical exposure in 2026, particularly for firms expanding digital channels.
“Talent shortages are beginning to weigh more heavily on operations, while cybersecurity is emerging as a critical business risk,” the report said.
Read also: Private sector drives pension surge as CPS enters new phase
Credit squeeze, policy gap weigh on expansion
The report points to a disconnect between macroeconomic improvements and real sector performance. While capital markets recorded gains, private sector credit declined, reflecting high borrowing costs and tighter lending conditions.
Manufacturing growth remained subdued at 1.4 percent, while agriculture expanded by 2.9 percent, both constrained by cost pressures and limited financing.
This gap, the report noted, reflects structural frictions including high production costs, logistics inefficiencies, and policy timing effects that raised input costs before efficiency gains materialised.
Outlook hinges on firm-level response
NESG concludes that 2026 will test the ability of firms to convert stabilisation into productivity gains. The focus is shifting from macroeconomic recovery to operational efficiency and competitiveness.
“Companies that secure reliable energy, diversify financing, strengthen supply chains, and invest in people and technology will be best placed to turn resilience into productivity,” the report stated.
While macroeconomic conditions are improving, the report makes clear that business performance in 2026 will depend less on policy shifts and more on how firms respond to evolving market risks and structural constraints.