Insecurity and unstable electricity supply have once again emerged as the most severe challenges confronting Nigerian businesses, according to the Central Bank of Nigeria’s Business Expectations Survey for October 2025.
According to The PUNCH, the report, released on Wednesday, highlighted that firms across major economic sectors rated insecurity highest at 71.8 points, followed by insufficient power supply (70.9 points), high or multiple taxation (70.2 points), high interest rates (68.4 points), and financial difficulties (65.6 points) as the top five obstacles hindering business operations and profitability.
“Respondents identified insecurity, poor power supply, multiple taxation, high lending rates, and financial constraints as the dominant factors negatively affecting business performance in October,” the CBN noted in the report.
Other key challenges mentioned included high bank charges (64.7), unfavourable economic climate (63.0), and unclear economic policies (62.3). Poor infrastructure (58.7) and an unfavourable political environment (57.5) ranked lowest among the ten major constraints.
The apex bank observed that businesses were “more concerned about financial and structural factors than political instability,” reflecting the weight of economic pressures on private enterprises.
Despite the prevailing challenges, the CBN report indicated a rise in optimism among Nigerian firms. The Overall Business Confidence Index (BCI) climbed to 38.5 points in October, up from 31.5 points in September, suggesting increased optimism about economic prospects.
Projections show that confidence could strengthen further to 45.6 points in November, 52.3 points in the next three months, and 52.5 points within six months, driven by expectations of stronger consumer demand, increased sales, and higher business activity.
Across sectors, the industrial sector recorded the highest optimism at 40.0 points, followed by agriculture (38.1 points) and services (37.6 points). The CBN said optimism is expected to remain steady through the first half of 2026, with industrial and agricultural growth likely to lead the expansion.
Regionally, the North-East showed the highest level of optimism at 56.1 points, followed by the North-Central (55.0) and North-West (54.5). The South-South, however, posted the lowest confidence level at 23.3 points, reflecting weaker activity in the oil-producing region.
All sectors expressed positive sentiment regarding their operations. The Mining and Quarrying sector recorded the highest confidence at 50.0 points, trailed by Non-Market Services (31.7), Agriculture (27.1), Construction (26.3), Market Services (24.4), and Manufacturing (16.6).
Firms also projected growth in orders and business activity, with confidence indices of 24.7 and 21.9 points, respectively. Regarding employment, the Construction sector showed the strongest hiring outlook at 36.8 points, while Mining and Quarrying led in planned expansion with 80.0 points.
Average capacity utilisation across industries rose slightly to 62.0 per cent in October from 60.4 per cent in September, indicating a modest improvement in production and resource use.
Businesses expressed moderate optimism about the naira and borrowing conditions. The exchange rate expectation index stood at 29.0 points in October, with projections of 32.8, 36.6, and 39.0 points over the next six months, suggesting expectations of a gradual appreciation of the naira.
Similarly, the borrowing rate expectation index ranged between 10.1 and 12.9 points, signalling cautious optimism about lending costs.
The volume of business activity is projected to grow gradually, with confidence indices estimated at 41.4 points for November, 48.3 in the next three months, and 50.2 in six months, pointing to a potential rebound in real economic activity toward the end of the year.
The CBN explained that the survey, conducted between October 6 and 10, covered 1,900 business enterprises across the industry, services, and agriculture sectors, achieving a 99.1 per cent response rate.
“The Business Expectations Survey reflects the opinions of business operators rather than the official stance of the Bank,” the report added, noting that the findings provide crucial insights into “business sentiment and emerging macroeconomic trends shaping Nigeria’s economy.”
