Business confidence rises despite insecurity, high taxes – Report

Nigerian businesses are entering 2026 with a surge of widespread optimism, according to the December 2025 Business Expectations Survey Report released by the Central Bank of Nigeria.

According to the survey, the aggregate Confidence Index reached 37.5 index points in December, with a trajectory projected to peak at 52.5 points over the next six months.

The PUNCH reports that the Confidence Index is an indicator of aggregate business sentiment. The December 2025 Business Expectations Survey was conducted from 1 to 5 December 2025, with a sample size of 1,900 business enterprises across Nigeria. The survey achieved a response rate of 97.3 per cent, covering three key sectors: industry, services, and agriculture.

The report highlighted the positive outlook despite a landscape littered with operational hurdles, indicating that firms are looking past immediate macro-environment struggles toward a more stable economic future.

The report revealed that the industry sector currently leads sectoral confidence at 38.7 index points. This buoyant outlook is mirrored across all broad sectors, including agriculture and services, all of which reported positive sentiment regarding the macroeconomy.

“All the sectors expressed optimism on the business outlook of the macroeconomy in the current month, with the industry sector leading at 38.7 index points. The optimism is expected to remain strong over the next six months, as confidence indices for industry and agriculture reflect sustained positive outlooks across all reviewed periods. However, services reflect slowed optimism for next month but higher optimism for the next three and six months.

“Respondents reported optimism on the volume of business activity for the next month and subsequent periods under review, indicating potential growth in economic activities. In line with the expected business expansion plan, businesses anticipate hiring more workers in January 2026. An analysis of the sectors showed that the agriculture sector had the highest prospect for expansion, while mining & quarrying had the highest prospect for employment in January 2026,” read part of the report.

A significant driver of this hope is the expectation of favourable business activity volumes in the coming months, alongside a projected appreciation of the naira against the US dollar and a steady decline in borrowing rates.

However, this optimism exists alongside a reality of systemic constraints. Surveyed firms identified insecurity (74.0 points) as the most significant factor threatening operational stability. Following closely are the pressures of high or multiple taxes (69.9 points), insufficient power supply (67.9 points), and high interest rates (67.5 points). These financial and infrastructural burdens continue to weigh heavily on profitability, yet they have not dampened the drive for growth.

Capacity utilisation across all sectors remained stable, averaging 49.8 per cent in December, with the construction sector reaching the highest utilisation levels for the month.

Geographically, the level of optimism varies significantly. The North-East region reported the highest optimism at 51.5 index points, while the South-East region recorded the lowest at 27.9 points. Despite these regional disparities, every zone in the country reported a positive outlook for the months ahead.

Ultimately, the December 2025 BES report paints a picture of a resilient private sector. While businesses are bracing for continued battles with insecurity and high costs, their focus is firmly set on expansion and hiring, fuelled by the anticipation of a stronger currency and a more favourable credit environment.(Punch)