Amid expectations of naira depreciation by year’s end, businesses in Nigeria have shown reduced confidence in the economy, as reflected in the Overall Confidence Index (OCI), which dropped by 3.2 points to 14.5 from 17.7.
This decline was highlighted in the Central Bank of Nigeria’s (CBN) October Business Expectation Survey (BES).
The survey further indicated a downward trend in the OCI for the current month, the following month, and the next six months.
According to the CBN, the OCI fell to 1.4, 4.8, and 21.8 points in October, down from 3.2, 6.2, and 29 points in September.
The CBN said: “The overall confidence index (CI) on the macroeconomy indicates that businesses were optimistic in October 2024.
“Respondent firms expect the naira to depreciate in the current month, next month and next 3 months. However, they expect appreciation in the next 6 months.
“Top six business constraints high interest rate, insecurity, high/multiple taxes, inadequate power supply, unfavourable economic climate, financial problems.
“The optimism on business outlook in the current month is driven by the opinion of respondents from all the Sectors except the Industry Sector.
“Most Sectors expressed optimism on their own operation in the review month. The outlook of respondents on the Volume of Business Activities, the Volume of Total Order, Financial Conditions, and Access to Credit were all positive in the review month.
“In line with the favourable expectations, businesses hope to employ more workers in the month of November 2024 except for the Construction Sector. An analysis of the Sectors showed that Agriculture had the highest prospect for employment and expansion in November 2024.
“Respondents mentioned High interest rates, insecurity and high/multiple taxes as top business constraints for October 2024.”