Businesses remain optimistic despite high taxes, insecurity

Nigerian businesses maintained a positive outlook in June 2026 despite persistent macroeconomic challenges, with high taxes, interest rates and insecurity remaining their biggest operational concerns, according to the Central Bank of Nigeria (CBN).

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The findings are contained in the June 2026 Business Expectations Survey (BES) released by the CBN’s Statistics Department under the Economic Policy Directorate.

The June 2026 BES was conducted between 8 and 12 June, covering 1,900 business enterprises across Nigeria.

The regulator said the survey methodology was enhanced from April 2026 by replacing the previous three-point weighted diffusion index with a five-point scale to provide a more nuanced assessment of business sentiment.

The report showed that the Business Confidence Index (BCI) stood at 7.2 points in June, indicating that businesses remained optimistic about the macroeconomy, although confidence moderated amid prevailing economic headwinds.

“The Business Confidence Index stood at 7.2 points in June 2026, signalling continued optimistic sentiment among formal businesses,” the report stated.

However, CBN said respondents identified high or multiple taxation (73.7 per cent) as the most significant business constraints, followed by insecurity (71.7 per cent) and high interest rates (67.0 per cent).

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Other major business concerns cited by businesses include unfavorable political climate (63.5 percent), high bank charges (61.9 percent), poor infrastructure (58.5 percent), and financial constraints (58.2 percent).

“In June 2026, businesses identified High/Multiple Taxation (73.7 per cent), Insecurity (71.7 per cent), and High Interest Rates (67.0.per cent) as the top three constraints.

“These were followed by Unfavourable Political Climate (63.5 per cent) and High Bank Charges (61.9 per cent). Poor Infrastructure (58.5 per cent) and Financial Constraints (58.2 per cent) ranked lower but remain significant,” it stated.

According to CBN, respondents’ positive sentiment was largely driven by economic diversification (38.3 per cent) and expansionary fiscal policy (16.2 per cent).

It said cautious views were mainly attributed to energy-related challenges (23.4 per cent) and elevated geopolitical uncertainties (16.5 per cent).

Sectors, regions

The report said all major sectors expressed optimism about the macroeconomy and their own business operations during the review period.

Among the sectors, CBN said mining and quarrying recorded the highest Business Confidence Index at 42.9 points and also posted the highest capacity utilisation during the month.

The apex added that confidence remained positive across all sectors over the next six months, although the industry and services sectors recorded slower confidence levels in June compared with the previous month, 12.5 to 10.9 points.

Regionally, respondents in Northern Nigeria expressed stronger confidence than their Southern counterparts during the review month.

While all regions were optimistic about the next three and six months, the report noted that only the South-East and South-South expressed negative expectations for the following month, whereas the North-East recorded the strongest optimism over the medium-term outlook.

On business activity, the apex bank said firms expect improvements in the volume of business activity in July, September and December 2026, with the volume of business activity index recording the highest confidence level among the selected business indicators.

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It added that although the Financial Condition Index and Credit Access Index remained positive, they were lower than other indicators. This suggested that financing conditions and access to credit continue to require attention.

Employment

The survey also showed mixed expectations for employment by the Nigerian businesses.

While the mining and quarrying sector recorded the strongest expansion outlook at 84.6 index points, hiring expectations across sectors remained cautious in the near term.

“Employment expectations in July 2026 were generally cautious across sectors, with the Mining and Quarrying sector exhibiting the least optimistic hiring outlook,” the report stated.

The survey further showed that businesses expect the naira to appreciate gradually against the US dollar across the review periods.

At the same time, respondents expect borrowing rates to remain elevated, with the relatively stable borrowing rate indices suggesting a moderate increase in financing costs over the near to medium term.