By Elizabeth Adegbesan
Firms are expecting borrowing cost for banks’ loans to decline in the next three months deapite seeing rates elevated in July. This was contained in the Central Bank of Nigeria’s, CBN, latest Business Expectation Survey Report. CBN said: “Respondents expect borrowing rates to remain elevated across the same periods, as indicated by the consistently positive borrowing rate indices. “The relatively stable indices, fluctuating around 18-19 points, suggest expectations of a marginal decrease in borrowing costs over the near – to medium term.”
The survey report also showed that the Business Confidence Index was 5.7 points, reflecting continued optimistic sentiment among formal businesses on the macro economy.
According to CBN, Respondents’ positive sentiment on macro economy was largely underpinned by increased demand (22.3 percent ), economic diversification (21.4 percent) and access to finance (15 percent ), while more guarded views were primarily driven by inflation (27.7 percent), insecurity (22.4 percent) ongoing energy-related challenges (23.4 percent) and elevated geopolitical uncertainties (16.5 percent). The outlook over the next six months, CBN maintained remains strong, with confidence indices in all sectors reflecting positive sentiment over the review periods. During the review period, businesses identified high/multiple taxation (70.8), insecurity (69.7) and high interest rate (66.3) as the top three business constraints.
These were followed by unfavourable political climate (62.2) and high bank charges (62.0). But competition (61.1) and unclear Economic Laws (58.4) ranked lower but remain significant. CBN noted that at the bottom of the top ten constraints were financial constraints (56.6) and poor infrastructure (55.1) reflecting relatively lower, though still significant factors. On expansion outlook, the electricity, water and gas sector posted the highest expansion outlook at 85.7 index points.
Nonetheless, employment expectations in August 2026 were mostly cautious across sectors, with the Mining & Quarrying sector having the most optimistic hiring outlook.
