The Central Bank of Nigeria (CBN) business survey for July 2024, released last week, has thrown up optimism for increased business confidence in the economy as the Naira is expected to stabilize over a six-month period.
Outlook for August, October, and January 2025 shows indices of 7.6, 19.3, and 30.7, respectively, with businesses expecting greater levels of improvement in macroeconomic conditions later in the year. While the Naira is expected to continue to weaken in the coming months, the data shows an expectation that it will appreciate by the end of the year.
The survey also shows positive employment outlook. The indices show different employment optimism levels, with agriculture the highest at 14.5, followed by construction at 13.9, and market services the lowest at 4.4.
However, the immediate expectation is weak. The index shows a 0.1 for July 2024, down from 3.0 in June. The survey included 1600 businesses across services, industries, and agriculture. It covers expectations for August, October, and January 2025.
According to the report, insecurity was the highest constraint to growth and business activity. Other factors are high interest rate, insufficient power supply, and high and multiple taxes.
The overall confidence of 0.1 points to a decline of 2 points from June, showing the impact of raise in interest rates in May, given that the survey was taking days ahead of the July monetary policy committee meeting.
Nigeria is going through one of the most difficult moments in history, with last year’s macroeconomic conditions and costs of living crisis the worst in a generation. The two-year inflation trajectory that started in April 2022 at 16.82% peaked at 34.19%, after July inflation recorded is 33.4%.
