Nigerian businesses identified poor electricity supply and insecurity as their most pressing challenges in March 2026, despite maintaining a broadly positive outlook on the economy.
This is according to the Central Bank of Nigeria’s latest Business Expectations Survey released on the apex bank’s website on Thursday.
The report showed that insufficient power supply topped the list of constraints with an index score of 74.5, followed closely by insecurity at 70.9, showing persistent structural issues affecting business operations across the country.
What the report says
Other major constraints highlighted by firms include high and multiple taxes at 69.2, elevated interest rates at 66.6, and financial challenges at 64.3, indicating a mix of cost pressures and macroeconomic headwinds limiting profitability and expansion.
- The report read, “Respondents identified Insufficient Power Supply (74.5), Insecurity (70.9), High/Multiple Taxes (69.2), High Interest Rate (66.6), and Financial Problems (64.3) as the top five (5) business constraints in March 2026, highlighting factors that directly impact operational stability and profitability.”
The apex bank noted that these constraints directly affect operational stability and business performance, even as companies expressed optimism about future economic conditions.
At the lower end of the top ten constraints were an unfavourable political climate, which recorded 60.4, and limited access to credit at 57.7, suggesting that while financing remains a concern, more immediate pressures stem from infrastructure and security challenges.
Overall, the CBN stressed the need for improvements in power supply, security conditions, and the broader regulatory and financial environment to strengthen business stability and profitability.
Business confidence remains positive
Despite these challenges, the survey showed that firms remained optimistic about the macroeconomic environment. The overall confidence index stood at 15.6 points in March, reflecting positive sentiment, although slightly lower than the previous month.
- Businesses expect this optimism to strengthen over time, with projections rising to 22.2 in the next month, 35.5 in three months, and 43.9 in six months, indicating expectations of gradual economic improvement.
- Sectoral analysis showed that all sectors recorded positive outlooks, with agriculture posting the highest confidence for the current period. Over the next six months, sentiment is expected to remain strong across industry, services, and agriculture.
Regionally, optimism was strongest in the North-East at 39.4 index points, while the South-East recorded the weakest sentiment at -5.5, making it the only region with a negative outlook in the current period.
Operations, expansion, and hiring plans improve
Firms also reported positive expectations regarding their own operations. The mining and quarrying sector led in business confidence on operational performance with 47.8 points, significantly higher than other sectors.
Across key performance indicators, businesses expressed optimism in total orders, business activity, financial conditions, and access to credit during the review period, suggesting resilience in core operations.
The outlook for expansion and employment also remained strong. Businesses indicated plans to increase hiring in April 2026, with the mining and quarrying sector showing the highest employment prospects, while agriculture recorded the strongest expansion plans.
Capacity utilisation and macro expectations
Average capacity utilisation across sectors stood at 52.5% in March 2026, reflecting moderate use of production capacity amid existing constraints.
On macroeconomic expectations, respondents anticipate a gradual appreciation of the naira against the US dollar in the coming months. They also expressed a positive outlook on borrowing rates across the review periods, indicating expectations of improved financial conditions.
The survey, conducted between March 9 and 13, 2026, covered 1,900 firms across industry, services, and agriculture, with a response rate of 99.7%. The CBN noted that the findings represent respondents’ views and not official policy positions.
What you should know
While firms remain optimistic about economic prospects, the dominance of power shortages and insecurity as top constraints highlights deep-rooted structural issues that continue to limit productivity and investment.
However, poor power supply has been ranked above insecurity, according to the latest CBN survey report.
