Market News

By Uche Usim

Central Bank of Nigeria (CBN), in its latest Business Expectations Survey (BES), identified multiple taxation, insecurity and high borrowing costs as major threats to local business operations in September.

The apex bank’s BES tracks how businesses view current economic conditions and their prospects for the months ahead.

According to the survey, high or multiple taxation recorded the highest constraint index at 67.1 points, followed by insecurity at 66.2 points and high interest rates at 64.3 points.

In simple terms, the findings show that businesses are struggling with the cost of paying different taxes and levies, security-related disruptions and the high cost of borrowing money from banks.

Other major concerns identified by businesses were an unfavourable political climate, with 61.8 points; high bank charges, 61.5 points; competition, 60.2 points; and unclear economic laws and an unfavourable economic climate, both at 58.7 points.

Financial constraints and poor infrastructure ranked among the lowest of the 10 major constraints, recording 57.5 and 55.0 points respectively.

Despite these pressures, businesses remained optimistic about the economy.

The CBN said the positive outlook was driven mainly by expectations of increased demand, economic diversification and improved access to finance.

In particular, increased demand accounted for 29.3 per cent of the reasons given by businesses for their optimism, followed by economic diversification at 18.9 per cent and access to finance at 13.5 per cent.

However, confidence in the services sector fell from 13.3 to 10.2 points, while agriculture declined from 13.9 to 12.8 points. Despite the declines, all three sectors remained in positive territory.

Businesses also expect borrowing costs to remain high in the near term, even though they see some possibility of a modest decline over the next six months.

For the near future, business confidence is projected to rise to 23.6 points by December 2026 and 36.1 points by March 2027, suggesting that firms expect economic conditions to improve gradually.

However, the CBN survey shows that taxation remains a major concern for businesses, indicating that the challenge is not only the amount of tax payable but also the number of taxes and levies firms encounter in their daily operations.