Lates Business Expectation survey of the CBN reveals companies in Nigeria have ranked “unclear economic laws” as one of the most vicious constraints to business operations in the country. This is only next to the lack of adequate power supply and interest rates, which recorded the highest negative sentiments from respondents.
- Respondents’ outlook on the volume of total order, business activity and financial
conditions (working capital) were positive during the review period.
- Firms identified insufficient power supply, high-interest rate, financial problems, unfavourable economic climate, unclear economic laws and unfavourable political climate as major factors constraining business activity.
- Respondent firms expect the Naira to appreciate in the current month, next month and next twelve months.
- Level of inflation is expected to increase slightly in both the next six months and the next twelve months; borrowing is expected to rise in the current month, next month and the next twelve months.
In the report cited by Nairametrics, respondents are optimistic about an economic turnaround in 2020 however they still list out the following as major constraints to business survival in Nigeria, Africa’s largest economy.
Respondent firms identified insufficient power supply (66.3 points), high-interest rate (57.8 points), financial problems (55.0 points), unfavourable economic climate (53.8 points), unclear economic laws (50.4 points), unfavourable political climate (45.3 points), insufficient demand (45.0 points), competition (44.7 points) and access to credit (42.5 points) as major factors constraining business activity in the current month
What this means: While the government continues to mention the ease of doing business as central to its economic policy, Nigerian business still face major challenges with the rising cost, haphazard regulations and multiple taxations. Power, high-interest rates and an unfavourable economic climate have been the bane of businesses for decades. However, “unclear economic laws” is a feature largely symptomatic of Buharinomics.
The Business Expectation Survey can be downloaded on the website of the CBN.