The Central Bank of Nigeria (CBN) says poor electricity supply and insecurity remained the most significant challenges facing Nigerian businesses in March 2026, despite a generally positive outlook on the economy.
According to the apex bank’s latest Business Expectations Survey released on Thursday, insufficient power supply ranked as the leading constraint with an index score of 74.5, followed by insecurity at 70.9—underscoring persistent structural bottlenecks affecting operations nationwide.
Other major constraints identified by firms include high and multiple taxes (69.2), elevated interest rates (66.6), and financial challenges (64.3), reflecting a combination of cost pressures and broader macroeconomic headwinds limiting profitability and expansion.
The report stated: “Respondents identified Insufficient Power Supply (74.5), Insecurity (70.9), High/Multiple Taxes (69.2), High Interest Rate (66.6), and Financial Problems (64.3) as the top five business constraints in March 2026.”
The CBN noted that these challenges continue to weigh on operational stability and business performance, even as firms expressed optimism about future economic conditions.
At the lower end of the top constraints were an unfavourable political climate (60.4) and limited access to credit (57.7), suggesting that while financing remains a concern, more immediate pressures stem from infrastructure deficits and security challenges.
Overall, the bank emphasised the need for improvements in power supply, security, and the broader regulatory and financial environment to strengthen business resilience and profitability.
Despite these constraints, the survey showed sustained business confidence. The overall confidence index stood at 15.6 points in March, indicating positive sentiment, though slightly lower than the previous month.
Firms expect this optimism to strengthen, with projections rising to 22.2 in the next month, 35.5 in three months, and 43.9 in six months—pointing to expectations of gradual economic recovery.
Sectoral analysis showed positive outlooks across all sectors, with agriculture posting the highest confidence in the current period. Over the next six months, sentiment is expected to remain strong across industry, services, and agriculture.
Regionally, optimism was strongest in the North-East at 39.4 index points, while the South-East recorded the weakest sentiment at -5.5, making it the only region with a negative outlook.
Operations, expansion, hiring outlook improve
Firms also reported improved expectations for their own operations. The mining and quarrying sector recorded the highest confidence in operational performance at 47.8 points.
Across key performance indicators—including total orders, business activity, financial conditions, and access to credit—businesses expressed optimism, indicating resilience in core operations.
Expansion and hiring plans also strengthened, with firms indicating intentions to increase employment in April 2026. The mining and quarrying sector showed the strongest hiring prospects, while agriculture recorded the most robust expansion plans.
Average capacity utilisation stood at 52.5 per cent in March, reflecting moderate production levels amid prevailing constraints.
On macroeconomic expectations, respondents anticipate a gradual appreciation of the naira against the US dollar and an improvement in borrowing conditions in the coming months.
The survey, conducted between March 9 and 13, 2026, covered 1,900 firms across industry, services, and agriculture, with a response rate of 99.7 per cent. The CBN noted that the findings reflect respondents’ views and not official policy positions.
While businesses remain cautiously optimistic, the dominance of power shortages and insecurity as leading constraints highlights deep-rooted structural challenges continuing to limit productivity and investment.
