A CBN survey revealed that Nigerian businesses have an optimistic outlook for the months of July, August, and December. The confidence index for the months stood at 31.8., 47.4 and 67.8 index points, respectively. This is following the largely pessimistic outlook towards the Nigerian economy for the month of June which had an overall confidence index (CI) of -24.3 index points.
The survey was conducted by the Statistics department of the Central Bank of Nigeria and it involved a sample of 1050 businesses that cut across small & medium enterprises (SMEs) as well as large corporations in Nigeria. Respondent firms also included import-based and export-based businesses alike. It attained a response rate of 96% and the sample took cognisance of companies in the agricultural industry, services, manufacturing, wholesale/retail trade, and construction.
The overall outlook of respondents on financial conditions like working capital, access to credit, and average capacity utilization was also negative. The only good expectation was from expected volume of business activities.
The Major Challenges
The firms that took part of the survey highlighted issues like insufficient power supply, competition, high-interest rate, financial problems, unfavourable economic climate, unclear economic laws, insufficient demand, unfavourable political climate, access to credit and lack of equipment as the primary factors that constrain business activity.
Regarding the currency outlook, respondent firms expect the Naira to depreciate in the current month. Much like the overall outlook, they also expect it to appreciate in July, August and December. Inflation level is also expected to rise and borrowing rate is equally expected to rise in the same months respectively.