Nigerian Business Owners Forecast Economic Upswing in Coming Months
Business owners in Nigeria are increasingly optimistic about the economic outlook for August 2024 and the following six months, according to the latest report from the Central Bank of Nigeria (CBN). The report, released on Wednesday, reveals an optimism index of 7.6 points for August, reflecting a positive shift in expectations for business performance.
The CBN’s Business Expectations report projects even greater optimism in the coming months, with indices rising to 19.3 points over the next three months and 30.7 points over the next six months. This anticipated improvement is largely driven by confidence in sectors such as Mining, Quarrying, Electricity, Gas & Water Supply, Agriculture, Market Services, Manufacturing, and Non-Market Services.
“The outlook for the next month, next three months, and next six months all indicated optimism with indices of 7.6, 19.3, and 30.7 points, respectively,” the report stated, highlighting the expected contributions from key sectors to the macroeconomic landscape.
The CBN report noted that the Agriculture sector is particularly bullish, driving much of the optimism for improved business conditions. However, the overall business confidence index for July 2024 stood at a modest 0.1 points, a slight decline of 3.0 points from June 2024.
Despite the positive sentiment, the report also underscores significant challenges facing businesses, including insecurity, high interest rates, insufficient power supply, and burdensome taxes. Business owners anticipate a continued depreciation of the exchange rate and a rise in borrowing costs in the near term, while inflation, currently at 34.19%, is viewed as excessively high.
Nonetheless, the overall outlook remains positive, with expectations of increased business activity and employment opportunities, particularly in the Agriculture, Industry, and Services sectors, signalling cautious optimism for Nigeria’s economic trajectory in the months ahead.
