Nigerian businesses are continuing to face significant challenges, with multiple taxation, insecurity and high interest rates emerging as the biggest obstacles to business operations, according to the latest Central Bank of Nigeria (CBN) Business Expectations Survey.
Despite the difficult operating environment, the survey showed that businesses remained cautiously optimistic about their prospects in the months ahead.
The Business Confidence Index stood at 13.4 points in September, indicating that firms generally maintained a positive outlook despite the challenges confronting the business
According to the survey, high or multiple taxation emerged as the biggest constraint to business activity, recording 67.1 points.
Insecurity followed with 66.2 points, while high interest rates ranked third at 64.3 points.
The figures reflect the growing pressure businesses face from multiple government levies, security challenges and the high cost of accessing credit.
Other major concerns identified by businesses included an unfavourable political climate, which scored 61.8 points, and high bank charges, at 61.5 points.
Competition recorded 60.2 points, while unclear economic laws and an unfavourable economic climate each scored 58.7 points.
Financial constraints stood at 57.5 points, while poor infrastructure ranked lowest among the 10 major constraints, with 55 points.
The findings suggest that businesses currently consider taxation, insecurity and expensive credit to be more pressing challenges than infrastructure deficiencies.
Despite the difficult operating conditions, the CBN survey showed that businesses maintained a positive outlook for the coming months.
Respondents attributed their optimism mainly to increased demand, economic diversification and improved access to finance.
Increased demand accounted for 29.3 per cent of the factors supporting business confidence, followed by economic diversification at 18.9 per cent and access to finance at 13.5 per cent.
The industrial sector recorded the strongest improvement in business sentiment during the month.
However, the continued high cost of borrowing could remain a major concern for businesses, particularly companies that depend on bank loans to finance working capital, expansion and new investments.
The survey also showed that businesses remained relatively optimistic about the performance of the naira against the US dollar, with respondents expecting modest gains across the various forecast periods.
Regional sentiment was generally positive, although the South-East was the only region that did not share the positive near-term outlook.
The North-East recorded the strongest optimism across the different forecast periods.
The latest findings highlight the difficult balance facing Nigerian businesses. While firms remain hopeful about demand, economic diversification and access to finance, persistent taxation, insecurity and high borrowing costs continue to put pressure on their operations