Business confidence among Nigerian firms weakened in June 2026, as rising operational costs and macroeconomic pressures weighed on sentiment, according to the Central Bank of Nigeria’s Business Expectations Survey (BES).
The survey showed the Business Confidence Index (BCI) fell to 7.2 points in June, down from 7.9 points in May, reflecting a slight deterioration despite optimism about the broader economic outlook.
The CBN noted that formal sector businesses remained positive overall, supported by economic reforms and diversification efforts, with projections that confidence could rise to 17.6 points in July, 24.1 points in three months, and 30.9 points in six months.
Drivers of optimism included economic diversification (38.3%) and government fiscal measures (16.2%), while challenges such as energy shortages (23.4%) and geopolitical risks (16.5%) dampened sentiment.
Sectoral results showed the Mining and Quarrying sector as most optimistic, with a confidence score of 42.9 points and the highest capacity utilisation rate at 58.5%.
Agriculture improved to 12.2 points, while industry slipped to 10.9 points and services fell sharply to 2.9 points.
Despite expectations of stronger activity and order inflows in July, firms remain cautious about hiring.
The Employment Outlook Index stayed negative at -8.3 points, as companies prioritised cost management over workforce expansion.
Regionally, confidence was strongest in the North-East (29.5 points) and North-West (19.8 points), but negative in the South-South (-7.9 points) and South-East (-9.0 points), reflecting uneven business conditions across Nigeria.
The survey also highlighted tight borrowing conditions, with private sector lending indices between 20–22 points, suggesting restrictive credit and high financing costs could continue to limit expansion plans through the rest of 2026.
SOURCE: economicconfidential.com