High bank charges, insecurity top business challenges in December 2024

Businesses in Nigeria identified high bank charges, poor infrastructure, and insecurity as major obstacles to their operations in December 2024.

The revelations are in the Central Bank of Nigeria’s (CBN) latest Business Expectations Survey.

The survey highlighted six critical constraints affecting business confidence: high bank charges, poor infrastructure, an unfavourable economic climate, insecurity, limited access to credit, and an unfavourable political climate.

Despite these hurdles, respondent firms maintained optimism about the macroeconomic outlook, underpinned by expectations of a stronger exchange rate, increased business activity, and a favourable volume of total orders.

“The overall capacity utilisation is positive for December 2024 with the Mining sector being the most positive; All three broad sectors expressed optimism on the macroeconomy in the review month.

“Respondent firms were optimistic about the volume of business activities in December 2024 January. March and June 2025 would be favourable; All sectors reported a positive outlook for employment and expansion for all the periods under review,” it said.

Business optimism

The overall Confidence Index (CI) for December 2024 stood at 17.0 and is projected to rise to 29.0 over the next six months.

Respondents attributed this positive sentiment to an anticipated appreciation of the naira, improved employment opportunities, and sectoral expansion, particularly in agriculture.

The agriculture sector emerged as the most optimistic, with respondents forecasting significant growth in January 2025.

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Other sectors, including mining, construction, and manufacturing, indicated a positive outlook for employment and expansion plans.

Firms expressed confidence in the naira’s potential appreciation. The exchange rate CI for the next month was 3.8, which is expected to increase to 13.6 in the next six months.

This optimism reflects broader hopes for macroeconomic stability as policymakers continue reforms to unify the exchange rate and address inflationary pressures.

Capacity utilisation was positive for December, with mining and quarrying showing the strongest performance. All broad sectors—industry, agriculture, and services—reported an optimistic outlook for business activities, driven by higher expectations for total orders and employment.

However, challenges such as limited access to credit and unfavourable financial conditions weighed on confidence levels. The credit access index remained negative at -10.8, reflecting ongoing difficulties for businesses seeking funding.

Persistent structural challenges

While firms remained upbeat about short-term prospects, long-standing structural issues, including inadequate infrastructure and a challenging political climate, continued to limit growth.

Respondents noted that addressing these systemic barriers is critical to unlocking the full potential of the Nigerian economy.

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The BES is a monthly survey conducted by the CBN, drawing data from a pool of leading firms listed in business establishment frames maintained by the CBN and the National Bureau of Statistics (NBS). The survey provides an early indication of changes in overall business activity within the economy.

The December 2024 edition of the BES was carried out between 9 and 13 December 2024, with a sample size of 1,900 business enterprises spread across Nigeria.

The bank said it achieved a robust response rate of 96.8 per cent, capturing insights from three key sectors: industry, services, and agriculture.