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By Chinwendu Obienyi
Insecurity and erratic power supply remain the most pressing challenges for Nigerian businesses, according to the Central Bank of Nigeria’s (CBN) Business Expectations Survey (BES) for October 2025.
The survey, which captures the sentiments of 1,900 firms across industry, services and agriculture, shows that businesses are grappling with high costs, operational instability, and financial pressures, even as confidence in the broader economy begins to recover.
The CBN report ranked insecurity highest at 71.8 points, followed closely by insufficient power supply (70.9), high or multiple taxes (70.2), high interest rates (68.4), and financial problems (65.6).
“Respondents identified Insecurity (71.8), Insufficient Power Supply (70.9), High/Multiple Taxes (70.2), High Interest Rate (68.4), and Financial Problems (65.6) as the top five business constraints in October 2025, highlighting factors that directly impact operational stability and profitability,” the report stated.
Other notable concerns included high bank charges (64.7), an unfavourable economic climate (63.0), and unclear economic laws (62.3), while poor infrastructure (58.7) and political uncertainty (57.5) ranked lower on the list of risks.
The CBN observed that financial pressures outweigh political risks, signalling that the main challenges to operational growth are cost-related rather than political.
“Business constraints were more focused on financial factors than political challenges,” the report noted, highlighting that firms remain particularly sensitive to rising input costs and credit conditions.
Despite these hurdles, the BES highlighted an improving sense of optimism among firms regarding the state of the Nigerian economy. The Overall Business Confidence Index (BCI) rose to 38.5 points in October 2025, up from 31.5 points in September, with projections of 45.6 points in November and 52.3–52.5 points over the next six months.
“Confidence is expected to rise further as firms anticipate increased demand, higher sales, and a rebound in consumer activity,” the report said.
Sector-specific data shows industry leading optimism at 40.0 points, followed by agriculture (38.1) and services (37.6). This confidence is projected to remain robust through the first half of 2026, driven by expectations of higher production, sales, and demand.
Regionally, the North East led optimism at 56.1 points, with the North-West (54.5) and North-Central (55.0) close behind. The South-South recorded the lowest confidence at 23.3 points, largely due to reduced output and lower business activity in oil-producing areas.
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Firms reported positive expectations for employment and expansion, with the Mining and Quarrying sector leading expansion prospects at 80.0 points, while Construction topped employment outlook at 36.8 points, followed by Agriculture (24.7), Non-Market Services (26.6), and Manufacturing (18.0).
Average capacity utilisation also saw a modest rise to 62.0% in October, up from 60.4% in September, reflecting a gradual recovery in industrial output and production activity.
“This suggested a slight increase in resource use across the surveyed firms,” the CBN said, noting the trend as a positive indicator for operational resilience.
Businesses expressed moderate optimism regarding the naira, expecting gradual appreciation over the next six months. The exchange rate expectation index stood at 29.0 points for October, with projections of 32.8 points in November, 36.6 points over three months, and 39.0 points over six months.
Similarly, the borrowing rate expectation index showed cautious optimism at 10.3 points in October, with projections ranging from 10.1 to 12.9 points in the next six months.
The survey also indicated that business activity is expected to rise gradually, with confidence indices projected at 41.4 points for November, 48.3 points over three months, and 50.2 points over six months, signaling potential recovery in real economic activity.
The Business Expectations Survey (BES) is a monthly assessment conducted by the CBN in collaboration with the National Bureau of Statistics (NBS). It gauges the sentiments of leading firms regarding the economy, tracking trends in business confidence, macroeconomic conditions, and operational expectations.
For October 2025, the survey was conducted between October 6 and 10, with a response rate of 99.1%, covering firms across industry, services, and agriculture.
The CBN emphasised that the BES reflects respondents’ views, not the Bank’s official position, and serves as a guide for monitoring business sentiment and potential policy interventions.
The October 2025 BES highlighted a paradox; while financial pressures, insecurity, and power shortages remain key obstacles, businesses are gradually regaining confidence in the economy’s trajectory.
“Business constraints were more focused on financial factors than political challenges,” the CBN report noted, highlighting that rising costs and limited credit, rather than political instability, are the dominant risks for firms.
As Nigeria navigates its complex business environment, the survey suggests that targeted interventions, improved power supply, affordable financing, and security enhancements, will be critical to sustaining growth and boosting business confidence heading into 2026.
