CBN Survey Shows Nigeria Business Owners Positive, Expect Naira Appreciation
- A new survey showed that businesses across all sectors are reporting improved optimism on the macroeconomy
- Businesses expect stronger activity and naira appreciation, but the employment outlook remains negative
- Key constraints remain insecurity, multiple taxation, and high interest rates, while Mining & Quarrying led expansion prospects
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Business confidence in Nigeria improved in May 2026, with firms across all sectors reporting a more positive outlook on the economy, even as they flagged insecurity, high taxes and elevated borrowing costs as major constraints, according to a survey by the Central Bank of Nigeria.
The Business Expectations Survey released on the CBN's website showed broad-based optimism across agriculture, industry and services, with companies expecting stronger business activity over the coming months and a gradual appreciation of the naira.
Source: Getty Images
However, employment expectations remained negative across all sectors, reflecting lingering caution in hiring decisions.
The survey, conducted with 1,900 firms and a 99.5% response rate, is jointly compiled with the National Bureau of Statistics.
Broad-based optimism despite weak hiring outlook
The report showed that all major sectors maintained positive expectations for current and future macroeconomic conditions. The industrial sector recorded a confidence index of 12.5 points, agriculture 9.4 points, and services 4.6 points, reflecting a steady improvement compared with April.
Firms also expressed optimism over business activity for June, August and November 2026, with confidence strengthening further over longer-term horizons.
However, employment sentiment remained weak, with companies across sectors indicating plans to slow or reduce hiring in the near term despite improving business conditions.
Mining sector leads expansion outlook
Among all sectors, Mining & Quarrying recorded the strongest expansion outlook at 69.2 points, followed by construction and agriculture. The sector also posted the highest capacity utilisation levels during the review period.
Overall average capacity utilisation stood at 55.9%, slightly below 56.0% in the previous month, suggesting marginal stability in production activity.
Naira expectations improve, borrowing costs stay high
Respondents expect the naira to appreciate against the US dollar over the short and medium term, reflecting improved market sentiment and expectations of policy stability.
However, borrowing costs are expected to remain elevated across all time horizons, underscoring persistent tight financial conditions for businesses.
Source: Getty Images
Insecurity, taxes and costs remain major constraints
Despite improved optimism, firms identified insecurity (72.9), multiple taxation (70.3), high interest rates (67.7), unfavourable political climate (64.2) and high bank charges (64.1) as the most severe operational challenges.
Other constraints included financial pressure, weak infrastructure and access to credit, highlighting structural bottlenecks affecting private sector growth.
Regional divergence in confidence
The survey revealed regional disparities in sentiment. The North-East recorded the strongest optimism, while parts of the South-East and South-South showed weaker or negative short-term expectations.
Over a six-month horizon, however, optimism was broadly positive across all geopolitical zones, indicating expectations of gradual economic stabilisation.
Outlook
While firms remain broadly optimistic about Nigeria’s macroeconomic trajectory, the report signals a dual reality of improving sentiment alongside persistent structural challenges, particularly in employment and operating costs.
The survey suggests that sustained policy reforms addressing security, taxation and financing conditions will be key to converting business confidence into real economic expansion.
SMEDAN lists how Nigerian entrepreneurs spend business loans
Earlier, Legit.ng reported that the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has raised concerns over widespread loan diversion by some Nigerian entrepreneurs, saying many beneficiaries of MSME funding schemes fail to repay and often disappear after collecting the funds.
SMEDAN’s Director-General, Charles Odii, said a major challenge facing small businesses in Nigeria is poor loan repayment culture, with several borrowers diverting funds meant for business expansion to personal expenses.
Source: Legit.ng
