Business conditions will improve soon – CBN

Business owners are optimistic that the conditions for doing business in Nigeria will improve in August 2024, and the following six months, the Central Bank of Nigeria has stated.

According to the Business Expectations report released by the apex bank on Wednesday, business owners expect businesses to perform better in August with an optimism index of 7.6 points.

In the next three months, the apex bank said the optimism index for businesses was slated at 19.3 points while the optimism index for the next six months was 30.7.

“Similarly, the outlook for 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 read.

It explained that the Mining, Quarrying, Electricity, Gas & Water Supply, Agriculture, Market Services, Manufacturing, and Non-Market Services will drive optimism in the macro economy.

It stated, “The expected drivers for the optimism on the macroeconomy in the next month are Mining, Quarrying, Electricity, Gas & Water Supply (35.3 points), Agriculture (9.9 points), Market Services (7.8 points), Manufacturing (6.3 points), and Non-Market Services (4.8 points).

“Respondents indicated optimism on the overall business outlook in July 2024, as the business conditions in Nigeria are expected to improve. This optimism is driven by the opinion of respondents from the Agriculture Sector.

“Respondents’ outlook for the next month, next 3 months, and next 6 months all indicated optimism. The positive outlook in the volume of business activities of the firms in the next month implied improved prospects for employment in the same period. The sector with the highest prospect for employment is the Agriculture Sector, followed by the Industry and Services sectors.

“The respondent firms opined that insecurity was the major factor constraining the business activity in July 2024. Other constraining factors are high interest rate, insufficient power supply, and high/multiple taxes. Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under

review. Respondents also opined that the current inflation rate of 34.19 is too high.”

In July 2024, the overall confidence index stood at 0.1 points, although it dropped by 3.0 points compared to the confidence levels reached in June 2024.