Nigerian businesses are becoming less confident in the economy as expectations of further naira depreciation loom before the year ends, according to the Central Bank of Nigeria’s (CBN) Business Expectation Survey for October. The Overall Confidence Index (OCI) dropped by 3.2 points to 14.5, down from 17.7 points in September, reflecting a waning business outlook.
The survey highlighted a decrease in the OCI for the current month, next month, and the upcoming six months, with the indexes falling to 1.4, 4.8, and 21.8 points respectively, compared to 3.2, 6.2, and 29 points recorded in September.
“The overall confidence index (CI) on the macroeconomy indicates that businesses were optimistic in October 2024,” the CBN noted. However, businesses expressed expectations for the naira’s depreciation over the next three months, with hopes for a potential appreciation within six months.
Key concerns affecting the business landscape include high interest rates, insecurity, multiple taxes, inadequate power supply, an unfavorable economic climate, and financial constraints, according to the survey.
Sectoral analysis showed that optimism on business operations was prevalent across all sectors except the Industry sector. Respondents also expressed a positive outlook on business volume, total orders, financial conditions, and access to credit during the review period.
In anticipation of improved conditions, many businesses plan to increase hiring in November, with the Agriculture sector showing the highest prospects for employment and expansion. The Construction sector, however, remains hesitant about workforce growth in the upcoming month.