Nigerian businesses remained cautiously optimistic about the economy in June 2026 despite mounting cost pressures, with high taxes, insecurity and elevated interest rates emerging as the biggest threats to operations, according to the Central Bank of Nigeria (CBN).
The findings, contained in the apex bank’s June 2026 Business Expectations Survey (BES), suggest that although businesses continue to see growth opportunities, confidence is being tempered by persistent structural and macroeconomic challenges that continue to weigh on investment and expansion decisions.
The survey, conducted between June 8 and 12 among 1,900 business enterprises nationwide, showed that the Business Confidence Index (BCI) stood at 7.2 points, indicating that firms maintained a positive assessment of current business conditions despite a moderation in sentiment.
The June edition was also the first to fully reflect the CBN’s enhanced survey methodology, introduced in April 2026, which replaced the previous three-point weighted diffusion index with a five-point scale to provide a more detailed measurement of business sentiment.
While optimism persisted, businesses identified multiple taxation as their most pressing challenge, with 73.7 per cent of respondents citing it as a major constraint. Insecurity ranked second at 71.7 per cent, followed by high interest rates at 67.0 per cent, underscoring the difficult operating environment facing the private sector.
Other concerns included an unfavourable political climate (63.5 per cent), high bank charges (61.9 per cent), poor infrastructure (58.5 per cent) and financial constraints (58.2 per cent), highlighting the broad range of factors limiting business competitiveness.
The survey indicates that confidence continues to be supported by expectations of economic diversification and government fiscal measures. About 38.3 per cent of respondents attributed their optimism to ongoing diversification of the economy, while 16.2 per cent pointed to expansionary fiscal policies.
However, businesses remained wary of external and domestic risks. Energy-related challenges accounted for 23.4 per cent of cautious responses, while geopolitical uncertainties contributed 16.5 per cent, reflecting concerns over rising operating costs and global economic instability.
Across sectors, businesses generally expressed confidence in both current operations and the medium-term economic outlook. The mining and quarrying sector recorded the strongest confidence, posting a Business Confidence Index of 42.9 points alongside the highest capacity utilisation during the month.
Although all sectors are expected to remain optimistic over the next six months, the industry and services sectors recorded a slight moderation in confidence compared with the previous month, suggesting that cost pressures are beginning to weigh more heavily on business sentiment.
Regional responses showed stronger optimism among businesses in Northern Nigeria than in the South. While respondents across all regions expressed positive expectations over the next three and six months, firms in the South-East and South-South anticipated weaker conditions in the immediate month ahead. The North-East recorded the strongest medium-term outlook.
Businesses also projected increased commercial activity through the second half of the year, with expectations for higher business volumes in July, September and December 2026. The volume of business activity index remained the strongest among key business indicators.
However, financing conditions continue to present challenges. Although both the Financial Condition Index and Credit Access Index remained positive, they lagged other indicators, suggesting that access to affordable financing remains constrained.
Employment expectations were mixed. While the mining and quarrying sector posted the strongest expansion outlook, overall hiring intentions across sectors remained cautious, reflecting businesses’ preference to delay workforce expansion amid elevated operating costs.
Looking ahead, respondents expect the naira to strengthen gradually against the US dollar over the coming months. Nevertheless, businesses anticipate borrowing costs will remain elevated, indicating that financing conditions are unlikely to ease significantly in the near term.