KEY POINTS

• Insecurity and erratic power supply remain the top operational constraints for Nigerian businesses, followed by taxes, high interest rates, and financial challenges.

• Business confidence is improving, with optimism in industry, agriculture, and services sectors, and expectations of higher employment and expansion in the coming months.

• Firms anticipate gradual improvement in naira stability and borrowing conditions, signalling cautious optimism for broader economic recovery.

Insecurity and unreliable electricity supply remain the most pressing challenges for Nigerian businesses, according to the Central Bank of Nigeria’s October 2025 Business Expectations Survey.

Nairametrics reports that firms across key sectors ranked insecurity highest, followed closely by insufficient power, multiple tax burdens, high interest rates, and general financial constraints.

The survey, conducted between October 6 and 10 and sampling 1,900 businesses nationwide, highlighted the direct impact of these challenges on operational stability and profitability. Insecurity scored 71.8 points, power shortages 70.9, high or multiple taxes 70.2, high interest rates 68.4, and financial problems 65.6.

Other concerns included high bank charges, an unfavourable economic climate, and unclear laws. Meanwhile, poor infrastructure and political instability were identified as relatively lower concerns, indicating that cost-related pressures, rather than politics, dominate the business environment.

Business Confidence Edges Up Amid Constraints

Despite the operational hurdles, the survey pointed to a cautious optimism among businesses. The Overall Business Confidence Index rose to 38.5 points in October from 31.5 points in September, with expectations to reach 45.6 points in November and above 52 points over the next three to six months. This signals anticipated growth in demand, sales, and consumer activity.

Sectoral optimism was strongest in industry (40.0 points), followed by agriculture (38.1) and services (37.6). Regionally, the North-East posted the highest confidence at 56.1 points, while the South-South lagged at 23.3 points, reflecting lower business volumes in oil-producing areas.

Businesses also expressed positive outlooks on employment and expansion. Mining and quarrying led with an 80.0-point expansion outlook, while construction anticipated the highest hiring rate at 36.8 points. Average capacity utilisation modestly increased to 62 per cent, up from 60.4 per cent, signalling a gradual recovery in industrial output.

Exchange Rate and Borrowing Outlook Remain Stable

The survey showed moderate optimism for currency stability and borrowing conditions. Firms expect gradual naira appreciation over six months, while borrowing rate expectations also remained broadly positive. Overall, businesses anticipate a slow but steady rise in activity, suggesting that economic recovery is underway despite persistent operational challenges.

The CBN emphasised that the survey reflects respondents’ perspectives and not the bank’s official position. It serves as a tool for tracking trends in business confidence and macroeconomic conditions.