Key points
- Insecurity ranks as the biggest challenge facing Nigerian businesses, ahead of taxes and interest rates.
- CBN survey shows firms struggle with energy costs, governance issues, and financing constraints.
- Despite challenges, business outlook remains cautiously positive across sectors.
Main story
Insecurity has emerged as the most significant challenge confronting businesses in Nigeria, according to the latest Business Expectations Survey of the Central Bank of Nigeria (CBN), overtaking taxation, high interest rates, and bank charges.
The report highlights the growing impact of structural and security-related risks on business sustainability in Africa’s largest economy.
In the April 2026 edition of the survey, insecurity recorded the highest constraint index at 74.1 points. It was followed by high and multiple taxation at 70.5 points, high interest rates at 67.4 points, high bank charges at 62.8 points, and stiff competition at 61.8 points.
The CBN noted that the findings reflect an operating environment increasingly shaped by risk and cost pressures rather than demand-driven factors.
“The business environment was shaped more by risk and cost pressures rather than by demand-related factors,” the apex bank stated.
The survey, conducted between April 6 and April 10, sampled 1,900 firms across the industrial, services, and agricultural sectors, with a response rate of 99.4 per cent.
Despite the challenging conditions, businesses expressed a cautiously optimistic outlook on the economy, although confidence levels moderated compared to the previous month.
The overall business outlook index stood at 3.9 points in April, with expectations rising to 16.9 points in the following month, 27 points within three months, and 34.6 points over a six-month horizon.
The anticipated improvement was driven mainly by expectations of expansionary policy measures, cited by 19 per cent of respondents, while improved access to finance and economic diversification accounted for 13 per cent each.
However, respondents continued to highlight deeper structural risks affecting operations. Energy-related challenges were identified as the most pressing concern by 35 per cent of firms, followed by governance issues at 33 per cent and geopolitical uncertainties at 14 per cent.
Sectoral analysis showed that the industrial sector recorded the highest confidence level at 8.8 index points, followed by agriculture at 2.7 points and services at 1.5 points.
Among subsectors, mining and quarrying posted the strongest confidence reading at 65.2 index points, ahead of manufacturing at 33.2 points and agriculture at 32.9 points.
The CBN also disclosed that it has revised its survey methodology from April 2026, replacing the previous three-point Likert scale with a five-point weighted diffusion index to provide a more detailed measurement of business sentiment.
The issues
The survey underscores the deepening impact of insecurity on Nigeria’s economic environment, alongside persistent challenges such as high taxation, elevated borrowing costs, energy constraints, and weak governance structures. These factors continue to undermine business productivity and investment confidence.
What’s being said
The CBN said the results show that Nigerian businesses are operating under significant risk and cost pressures, rather than demand-related constraints.
Firms surveyed also pointed to expectations of policy reforms, improved access to finance, and economic diversification as key drivers of future confidence.
What’s next
Policymakers are expected to review security, fiscal, and monetary strategies as business concerns over insecurity and operating costs intensify. The CBN’s revised survey methodology will also continue to provide updated sentiment tracking in subsequent reports.
Bottom line
The latest CBN survey paints a clear picture of an economy where insecurity has become the dominant drag on business operations, even as firms cautiously maintain hope for gradual economic improvement.
