Business confidence climbs to 14.8 points as firms expect stronger naira, cheaper credit

Business confidence among Nigerian enterprises strengthened sharply in August, with the Central Bank of Nigeria's Business Expectations Survey showing the overall Business Confidence Index rising to 14.8 points from 5.7 points in July.

Respondents expect the naira to appreciate against the United States dollar across the current, one-month, three-month and six-month review periods. They also expect borrowing costs to ease marginally, a combination the CBN survey says could support credit demand and loan repayment capacity in the banking sector.

Firms see sentiment rising into 2027

The survey projects business confidence climbing further to 23.6 points in September, 30.1 points in November 2026 and 36.1 points by February 2027.

Increased demand, economic diversification and the monetary policy stance were the main drivers of the positive mood, accounting for 25.9 percent, 18.3 percent and 14.2 percent respectively.

Financial condition and credit access indices stayed positive. The volume of total orders stood at 20.3 points, while the volume of business activity was 19.7 points.

Borrowing-rate indices held within the 18 to 19 point range across the review periods, pointing to expectations of some moderation in financing costs.

Taxation, insecurity still weigh on businesses

High interest rates remain one of the biggest constraints identified by firms, with an index of 63.5 points. High bank charges ranked fourth at 61.1 points.

Multiple taxation ranked highest at 67.8 points, followed by insecurity at 66.9 points. Competition recorded 59.5 points, while unclear economic laws and an unfavourable economic climate each stood at 57.7 points.

Despite these concerns, every broad sector maintained a positive macroeconomic outlook. Industry rose to 17.1 points in August from 11.5 points in July. Agriculture climbed from 3.4 to 13.9 points, while Services moved from 3.6 to 13.3 points.

Electricity, Gas and Water Supply recorded the strongest confidence in its own operations at 50.0 points, followed by Mining and Quarrying at 46.7 points and Agriculture at 44.9 points.

Construction posted the strongest expansion outlook at 73.9 points, which the CBN data suggests could open lending opportunities for banks along the construction value chain.

Capacity utilisation holds steady

Average capacity utilisation remained broadly stable at 55.8 percent in August, compared with 55.9 percent in July. Mining and Quarrying recorded the highest capacity utilisation at 58.1 percent.

The CBN said the August survey was conducted between August 9 and 14, 2026, covering 1,900 business enterprises across Industry, Services and Agriculture, with a response rate of 96.8 percent.

For Nigerian businesses, the reading points to firmer demand expectations, but the cost of credit remains the sticking point. If the expected naira appreciation and marginal easing in borrowing costs materialise, working capital and investment loans could become more attractive in the coming months.