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Business confidence in Nigeria improved in May 2026 despite persistent challenges such as insecurity, high borrowing costs, and multiple taxation.
This is according to the latest Business Expectations Survey released by the Central Bank of Nigeria (CBN).
The survey showed that the Business Confidence Index (BCI) stood at 7.9 points in May, an increase from 3.9 index points in April, reflecting a mixed but generally positive outlook among businesses regarding the country’s economic environment.
According to the apex bank, improved perceptions of government policies and progress in economic diversification supported business sentiment, although concerns over energy supply and geopolitical uncertainties continued to weigh on operations.
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What the report is saying
The CBN survey showed that businesses remained optimistic about the economy despite several structural constraints affecting the operating environment.
- Improvement in sentiment was driven by easing governance and policy-related concerns (15.7%) and progress in economic diversification (15.6%), according to the survey.
- Businesses identified energy-related challenges (26.7%) and geopolitical uncertainties (7.7%) as key factors dampening confidence.
- All major sectors maintained positive expectations for the current month, with agriculture rising from 2.7 to 9.4 index points, services improving from 1.5 to 4.6, and industry increasing from 8.8 to 12.5.
The survey also indicated that business optimism remains positive over the next six months, with confidence levels strengthening across most sectors of the economy.
More Insights
Sectoral and regional data from the survey suggest that while confidence is improving, businesses continue to operate under significant cost and security pressures.
- The Mining and Quarrying sector recorded the strongest outlook for business operations with 63.6 index points and the highest expansion outlook at 69.2 points.
All sectors expressed caution regarding employment conditions, with the non-market services sector reporting the weakest hiring expectations.
- Businesses identified insecurity (72.9), high and multiple taxes (70.3), high interest rates (67.7), unfavourable political conditions (64.2), and high bank charges (64.1) as the top business constraints.
- Financial challenges (59.7) and poor infrastructure (58.2) also featured among the top ten obstacles affecting business operations.
Regionally, the survey revealed mixed sentiment for the current month. While most regions expressed optimism for future economic conditions, the South-East remained cautious in its outlook for the next month. Over the three- and six-month periods, however, all regions reported positive expectations, with the North-East emerging as the most optimistic.
The findings indicate that while businesses acknowledge ongoing reforms, many are still navigating a difficult operating environment characterised by high costs and uncertainty.
The CBN survey also provided insights into business expectations for key macroeconomic indicators over the coming months.
- Respondents expect the naira to gradually appreciate against the United States dollar over the review period.
- Businesses anticipate that borrowing costs will remain elevated despite improvements in other economic indicators.
- Average capacity utilisation remained largely stable, easing slightly from 56.0% to 55.9%.
- The slight decline in capacity utilisation reflects ongoing production cost pressures faced by businesses.
What you should know
In its May 2026 report, the Nigerian Economic Summit Group stated that Nigeria’s business environment recorded a modest improvement.
The National Bureau of Statistics (NBS) reported that Nigeria’s economy recorded a real Gross Domestic Product (GDP) growth of 3.89% year-on-year in the first quarter of 2026.
In nominal terms, aggregate GDP at basic prices rose to N110.79 trillion in Q1 2026 from N94.05 trillion in Q1 2025, representing a nominal year-on-year growth of 17.79 per cent.
