Business confidence in Nigeria improved significantly in May 2026, according to the latest survey by the Central Bank of Nigeria, even as firms continue to grapple with insecurity, high borrowing costs, multiple taxation, and energy constraints. The report showed that the Business Confidence Index climbed to 7.9 points in May, up from 3.9 in April, signalling a stronger but still cautious outlook among private sector operators.
Brandspur Banking News Desk reports that the improved sentiment was largely driven by better perceptions of government policy direction and ongoing economic diversification efforts, although structural challenges such as energy instability and geopolitical uncertainty continued to weigh on business operations nationwide.
According to findings from the Business Expectations Survey, firms pointed to easing policy concerns, which accounted for 15.7 percent of the positive sentiment shift, while progress in economic diversification contributed 15.6 percent. However, these gains were tempered by persistent operational headwinds, including energy-related disruptions at 26.7 percent and geopolitical risks at 7.7 percent.
Across key sectors, the outlook remained broadly positive for the current month. Agriculture recorded a rise in confidence from 2.7 to 9.4 index points, services improved from 1.5 to 4.6, and industry advanced from 8.8 to 12.5, reflecting a gradual recovery in activity levels despite cost pressures.
The survey also highlighted that businesses maintain a positive outlook over the next six months, with expectations strengthening across most sectors of the economy. The mining and quarrying segment recorded the strongest operational outlook at 63.6 index points and the highest expansion expectation at 69.2 points, signalling robust medium-term activity potential in the extractive sector.
Despite this optimism, employment expectations remained subdued across all sectors, with non-market services showing the weakest hiring outlook, suggesting that firms remain cautious about expanding payrolls amid uncertain conditions.
Respondents identified insecurity at 72.9 percent, multiple taxation at 70.3 percent, high interest rates at 67.7 percent, unfavourable political conditions at 64.2 percent, and elevated bank charges at 64.1 percent as the most significant constraints affecting business performance. Financial stress and weak infrastructure also featured prominently among operational challenges.
Regional analysis revealed mixed sentiment in the short term, with most zones expecting improved conditions over time. The South-East maintained a cautious stance for the immediate outlook, while the North-East emerged as the most optimistic region over the medium term, reflecting uneven recovery patterns across the country.
The survey further indicated that businesses expect the naira to strengthen gradually against the United States dollar in the coming months, even as borrowing costs are projected to remain elevated. Capacity utilisation edged slightly downward from 56.0 percent to 55.9 percent, reflecting ongoing production cost pressures.
Broader macroeconomic context from the National Bureau of Statistics showed that Nigeria’s economy expanded by 3.89 percent year-on-year in the first quarter of 2026, while nominal GDP rose to N110.79 trillion from N94.05 trillion in the same period last year. The Nigerian Economic Summit Group also recently reported modest improvements in the country’s overall business environment, though structural challenges persist.
Overall, the latest data suggests that while Nigerian businesses are increasingly optimistic about future conditions, sustained growth will depend on how effectively longstanding issues around security, cost pressures, and infrastructure are addressed in the months ahead.
