Businesses optimistic about improved conditions- CBN survey

The Central Bank of Nigeria (CBN) has released its Business Expectations report, indicating a surge in optimism among business owners regarding improved conditions for doing business in the country.

The apex bank reveals an impressive optimism index of 7.6 points for August 2024, 19.3 points was slated for the next three months, and a remarkable 30.7 points for the next six months.

This optimism is driven by key sectors, including Mining, Quarrying, Electricity, Gas & Water Supply, which lead with 35.3 points. Agriculture follows closely with 9.9 points, while Market Services, Manufacturing, and Non-Market Services contribute 7.8, 6.3, and 4.8 points, respectively.

The report highlights improved prospects for employment, particularly in the Agriculture, Industry, and Services sectors. This positive outlook suggests a potential boost in job creation and economic growth.

Business owners identify significant constraints for business activities in July 2024, including insecurity, high interest rates, insufficient power supply, and high/multiple taxes.

In July 2024, the overall confidence index stood at 0.1 points, although it dropped by 3.0 points compared to the confidence levels reached in June 2024.

Despite these obstacles, respondents expect the exchange rate to depreciate in all review periods, except for the next six months. Additionally, they anticipate a rise in borrowing rates, which may impact business expansion.

Notably, respondents express concerns about the high inflation rate of 34.19%, which affects business operations and consumer purchasing power.

The CBN’s Business Expectations Survey measures confidence in macroeconomic conditions, sampling 1,600 business owners across various sectors with 98.9 per cent of the firms responding.

Although the overall confidence index dropped by 3.0 points in July 2024, business owners remain optimistic about future improvements. The CBN’s report suggests a positive outlook for Nigeria’s economy, driven by key sectors and improved employment prospects.