Nigeria: Insecurity, High Interest Rates, and Multiple Taxes Hamper Business Growth – CBN Survey

The Central Bank of Nigeria (CBN) has identified insecurity, high interest rates, and multiple taxation as the main challenges faced by businesses in August 2024. This was highlighted in its recently released Business Expectation Survey (BES) report. Despite these constraints, the surveyed firms expressed optimism about the future, particularly in terms of business activity and employment prospects over the next six months.

According to the CBN, the positive outlook points to potential improvements in employment opportunities during this period, with the agriculture sector expected to lead in job creation, followed by the industry and services sectors.

The report further stated, “The overall confidence index (CI) at 0.9 index points shows that businesses remain optimistic about macroeconomic conditions, anticipating better business environments during the review period.”

Key drivers of this optimism in the upcoming month include sectors such as mining, quarrying, electricity, gas, and water supply (34.8 points), non-market services (12.8 points), market services (12.4 points), agriculture (11.7 points), and manufacturing (7.7 points). The index reflects an improvement of 0.8 points compared to the previous month.

Businesses are particularly hopeful about increased business activities and employment growth. Respondents from sectors like mining, quarrying, electricity, gas, water supply (30.4 points), agriculture (5.2 points), and non-market services (2.7 points) led the positive outlook for August 2024.

Looking ahead, businesses remain optimistic for the next month, three months, and six months, with confidence indices of 11.1, 23.1, and 34.2 points, respectively. This positive trend suggests a favorable business environment and potential job growth across various sectors.

The report also outlined several challenges that businesses faced during the month, with insecurity being the top concern, followed by high interest rates, multiple taxes, unfavorable economic conditions, and insufficient power supply.

The CBN report highlighted that addressing these obstacles would be crucial to fostering sustained economic stability and expanding job opportunities across Nigeria.