Nigerian businesses continued to face significant operating pressures in July, with high or multiple taxation, insecurity and elevated interest rates emerging as their biggest constraints, according to the Central Bank of Nigeria’s (CBN) latest Business Expectations Survey.
The July 2026 survey, conducted among 1,900 businesses across the industry, services and agriculture sectors, showed that high or multiple taxation ranked as the leading challenge, recording an index of 70.8 points.
Insecurity ranked second at 69.7 points, while high interest rates ranked third at 66.3 points. Unfavourable political conditions and high bank charges were also identified as significant pressures on businesses.
Despite the difficult operating environment, businesses expressed stronger optimism about economic conditions in the coming months.
The national Business Confidence Index stood at 5.7 points in July but is projected to rise to 20.0 points in August, 27.8 points over the next three months and 35.8 points over the next six months.
According to the survey, increased demand was the leading factor supporting positive business sentiment, accounting for 22.3 per cent of responses. Economic diversification followed at 21.4 per cent, while improved access to finance accounted for 15 per cent.
Inflation remained the biggest factor influencing businesses’ assessment of the macroeconomic environment, accounting for 27.7 per cent of responses. Energy-related challenges accounted for 23.4 per cent, insecurity 22.4 per cent and geopolitical uncertainties 16.5 per cent.
Regional confidence varies
The survey showed significant differences in business confidence across Nigeria’s regions.
The North-West recorded the strongest current-month confidence at 16.0 points, followed by the North-East at 15.1 points and North-Central at 10.2 points.
The South-West recorded 6.9 points, while confidence was negative in the South-East and South-South, at -9.3 and -9.8 points respectively.
However, businesses across all regions maintained positive expectations for the following month and over the three- and six-month outlooks, with the North-East recording the strongest forward expectations.
Industry outlook improves
Sectoral performance was mixed during the month.
Confidence in the industry sector increased to 11.5 points from 10.5 points in June, while services rose to 3.6 points from 2.9 points.
Agriculture, however, recorded a sharp decline, falling to 3.4 points from 12.2 points in June.
Over the next six months, industry is expected to record the strongest confidence at 40.2 points, followed by services at 34.6 points and agriculture at 31.6 points.
Average capacity utilisation also edged up to 55.9 per cent in July from 55.3 per cent in June. Mining and quarrying recorded the highest capacity utilisation at 67.5 per cent, followed by manufacturing at 55.9 per cent, agriculture at 54.8 per cent and construction at 47.4 per cent.
The survey further showed improving expectations for business activity, with the Volume of Total Order Index recording 16.9 points and the Volume of Business Activity Index standing at 16.1 points.
However, financing remained a concern, with the Financial Condition Index at 12.9 points and the Credit Access Index at 9.5 points.
The findings suggest that while Nigerian businesses expect conditions to improve, persistent challenges around taxation, insecurity, borrowing costs and access to finance continue to weigh on their current operations and expansion plans.
Source: BusinessDay
