Business Confidence Improves Despite Insecurity and Heavy Taxes – Report

Nigerian businesses are heading into 2026 with renewed optimism, according to the December 2025 Business Expectations Survey released by the Central Bank of Nigeria (CBN).

The survey shows that the aggregate Business Confidence Index stood at 37.5 index points in December, with expectations that it will rise to as high as 52.5 points within the next six months, signalling growing confidence across the private sector.

The Confidence Index, which measures overall business sentiment, reflects responses gathered between December 1 and 5, 2025, from 1,900 business enterprises nationwide. The survey recorded a response rate of 97.3 per cent and covered three major sectors of the economy: industry, services and agriculture.

Despite ongoing operational and macroeconomic challenges, the report indicates that businesses are increasingly focused on longer-term stability and growth prospects. The industrial sector recorded the highest level of confidence at 38.7 index points, with agriculture and services also posting positive sentiment about the broader economic outlook.

According to the report, all sectors expressed optimism about current macroeconomic conditions, with expectations that confidence will remain strong over the next six months. While the services sector showed slightly slower optimism in the near term, it recorded stronger confidence over the three- and six-month outlook. Businesses across sectors also expressed confidence in higher volumes of activity in the coming months, pointing to potential growth in overall economic output.

In line with anticipated expansion, firms expect to increase hiring in January 2026. Sectoral analysis shows that agriculture has the strongest prospects for business expansion, while mining and quarrying is expected to record the highest employment growth in the period.

Supporting this optimism are expectations of improved business activity, a projected appreciation of the naira against the US dollar, and a gradual decline in interest rates, which businesses believe will ease financing conditions.

However, the report also highlights persistent structural challenges. Insecurity was identified as the most significant threat to operations, scoring 74.0 index points. This was followed by high or multiple taxation at 69.9 points, inadequate power supply at 67.9 points, and elevated interest rates at 67.5 points. Although these constraints continue to affect profitability and operations, they have not significantly dampened business expansion plans.

Capacity utilisation across all sectors remained steady at an average of 49.8 per cent in December, with the construction sector recording the highest utilisation rate during the period.

Regional sentiment varied, with the North-East posting the highest level of optimism at 51.5 index points, while the South-East recorded the lowest at 27.9 points. Nevertheless, all geopolitical zones reported positive expectations for the months ahead.

Overall, the December 2025 survey presents a picture of resilience within Nigeria’s private sector. While businesses continue to grapple with insecurity, high taxes and infrastructure deficits, their outlook remains focused on growth, expansion and job creation, driven by expectations of a stronger currency and more favourable credit conditions.