Multiple taxation, high interest rates and inadequate infrastructure remained the biggest constraints to business growth in June, despite sustained optimism among Nigerian firms about the country’s economic outlook, according to the latest Business Expectations Survey (BES) released by the Central Bank of Nigeria (CBN).
The survey showed that the Business Confidence Index (BCI) moderated to 7.2 points in June from 7.9 points in May, reflecting the impact of rising operating costs and persistent structural challenges on business activities.
Despite the slight decline, the CBN said businesses remained optimistic about future economic conditions, projecting stronger confidence in the coming months. “The Business Confidence Index stood at 7.2 points in June 2026, signalling continued optimistic sentiment among formal businesses,” the apex bank said.
The survey projected that the index would rise to 17.6 points in July, 24.1 points over the next three months, and 30.9 points within the next six months. According to the report, respondents identified multiple taxes, high borrowing costs, insufficient power supply, and unfavourable economic conditions as the major obstacles to business expansion.
Other constraints cited by respondents include exchange rate fluctuations, insecurity, and limited access to finance.
The CBN noted that 38.3 per cent of respondents attributed their optimism to ongoing economic diversification efforts, while 16.2 per cent said government fiscal policies had improved business prospects.
The report said, “In June 2026, businesses identified High/Multiple Taxation (73.7%), Insecurity (71.7%), and High Interest Rates (67.0%) as the top three constraints. These were followed by Unfavourable Political Climate (63.5%) and High Bank Charges (61.9%). Poor Infrastructure (58.5%) and Financial Constraints (58.2%) ranked lower but remain significant. “At the bottom of the top ten constraints were Poor Infrastructure (58.5) and Financial Constraints (58.2) reflecting relatively lower, though still significant constraints.”
Sectoral analysis showed that the Mining and Quarrying sector remained the most optimistic, recording a Business Confidence Index of 42.9 points. The sector also posted the highest average capacity utilisation rate of 58.5 per cent, with 84.6 per cent of firms indicating plans to expand operations.The Agriculture sector recorded improved confidence, rising to 12.2 points in June from 9.4 points in May.
However, confidence weakened in the Industrial sector, which declined to 10.9 points from 12.5 points, while the Services sector posted the weakest performance with a confidence score of 2.9 points. Across all sectors, average capacity utilisation eased slightly to 55.3 per cent, compared with 55.9 per cent recorded in May.
Although businesses expect stronger activity and increased customer orders in the coming months, many remain reluctant to recruit additional workers.
The survey showed the Employment Outlook Index remained negative at -8.3 points, indicating that firms are prioritising cost control amid elevated financing costs and economic uncertainty.
Regionally, the North-East recorded the highest level of business confidence at 29.5 points, followed by the North-West with 19.8 points. By contrast, business sentiment remained negative in the South-South and South-East, which recorded confidence indices of -7.9 points and -9.0 points, respectively.
The CBN said businesses anticipate a gradual appreciation of the Naira against the US dollar over the review horizon, as evidenced by reported positive indices.
However, the survey noted that tight credit conditions and elevated lending rates continue to limit investment and expansion plans, underscoring the need to address financing costs and other structural bottlenecks to sustain business confidence.
Nigerians can now invest ₦2.5 million on premium domains and profit about ₦17-₦25 million. All earnings paid in US Dollars. Rather than wonder, click here to find out how it works.