Why Businesses are confident about the direction of the economy
The Central Bank of Nigeria (CBN) released its Business Expectations Survey for September 2025, revealing a notable surge in corporate optimism across the country. The nationwide Confidence Index climbed to 31.5 points, marking a clear improvement from 28.9 points recorded in August 2025. This upward movement signals that increasingly, businesses are confident about the direction of the economy and the steadiness of recent policy measures.
Every major sector registered a positive outlook, underscoring broad-based improvement in sentiment. The services sector emerged as the most upbeat, posting an index of 32.5 points. Agriculture followed closely with 30.6 points, while the industrial sector recorded 30.0 points. Notably, agricultural firms reported the strongest current capacity utilisation, demonstrating that existing facilities are being used more intensively. Meanwhile, businesses in the mining and quarrying sub-sector displayed the most ambitious expansion plans for the near term.
Looking ahead, employers in non-market services (such as education, healthcare, and public administration-related activities) expressed the strongest intention to increase headcount in October 2025, pointing to rising demand and operational scaling in those areas. Respondents across the board anticipate further growth in business volumes not only in the immediate month ahead but also through December 2025 and into March 2026. Perhaps most encouragingly, the six-month forward confidence index is projected to reach 51.8 points, suggesting that the current recovery momentum is expected to gather even greater strength.
A noteworthy highlight is the widespread expectation of naira appreciation over the coming months, which would ease imported input costs and bolster profit margins for many enterprises.
Nevertheless, significant operational hurdles persist. When asked to identify their primary challenges, an overwhelming majority of firms pointed to the same trio of issues: exorbitant bank lending rates and charges (cited by 70.8% of respondents), excessive taxation (also 70.8%), and unreliable infrastructure, particularly power supply and transportation networks (70.7%). These long-standing bottlenecks continue to erode competitiveness and squeeze profitability, even as overall sentiment improves.
For Nigeria to lock in and amplify this growing business confidence, deliberate and urgent policy action is essential. Priorities include expanding access to affordable credit through targeted interventions or lower effective borrowing costs, streamlining and rationalising the tax system to reduce the compliance burden and overall fiscal pressure on firms, and accelerating public and private investment in critical infrastructure—especially reliable electricity, modern transport logistics, and digital connectivity. Addressing these structural impediments will unlock higher productivity, encourage fresh investment, and place the ongoing economic recovery on a far more sustainable footing.
