The Nigerian trade sector is confronting a financing squeeze despite registering growth in merchandise trade and positive cash flow conditions in the first half of 2026. The Nigerian Economic Summit Group (NESG) report highlights limited access to appropriate financing as the leading constraint affecting businesses in the sector.
According to the NESG’s Trade Sector Report: From High Volume Commerce to Productive Distribution, businesses in Nigeria‘s trade sector continued to experience liquidity but struggled with profitability. While traders maintained relatively sound cash flow and enjoyed some credit access, these did not translate into suitable financing terms needed for business expansion.
The report ranked limited access to financing as the foremost challenge to trade businesses, scoring 12 on the constraint index. Other notable concerns include inadequate power supply, unclear economic policies, and the high cost of commercial leases and rental properties, each scoring 10. Notably, financing constraints have moved from second place in 2024 to the top position in 2026, signaling a growing issue despite the Access to Credit Index remaining in an expansionary zone at 112.0.
This disconnect indicates that while credit may be available, the terms regarding cost, scale, and repayment periods are unfavorable to support business growth effectively. On a positive note, the declining prominence of foreign exchange availability as a constraint signals some improvement in this area for traders.
Financial indicators reveal a mixed picture: the Access to Credit Index stood at 112.0 and the Cash Flow Index at 121.9, both suggesting expansionary conditions. However, profitability experienced a downturn, with the Operating Profit Index dropping slightly below 100, moving into contraction territory compared to the previous year.
Despite optimism about future turnover and operational conditions reflected in a neutral Future Investment Index of 100, this has not yet led to significant expansionary investment activities among traders.
The developments come amid notable growth in Nigeria’s merchandise trade. Total merchandise trade reached N41.44 trillion in the second quarter of 2026, a 5.61% increase from the same period in 2025. The trade sector also contributed 17.89% to Nigeria’s Gross Domestic Product in the first quarter of 2026, underscoring its importance to the national economy.
These findings are critical for policymakers and stakeholders aiming to sustain and enhance the sector’s contribution to Nigeria’s economy. Addressing the financing and infrastructure challenges could help improve profitability and enable businesses to invest more confidently in growth, ultimately supporting broader economic development goals.
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