Business confidence among Nigerian firms weakened slightly in June 2026 as rising operating costs and persistent macroeconomic challenges tempered optimism, according to the latest Business Expectations Survey (BES) released by the Central Bank of Nigeria (CBN).
The survey showed the Business Confidence Index (BCI) fell to 7.2 points in June, down from 7.9 points in May, indicating that while businesses remain optimistic about the economy, confidence has softened.
The CBN’s Statistics Department said businesses in the formal sector continued to express confidence in the economy, driven largely by ongoing government reforms and efforts to diversify economic activities.
“The Business Confidence Index stood at 7.2 points in June 2026, signalling continued optimistic sentiment among formal businesses,” the report stated.
The apex bank expects confidence to strengthen in the coming months, projecting the index to rise to 17.6 points in July, 24.1 points over the next three months, and 30.9 points within six months, reflecting expectations of improved macroeconomic conditions.
Businesses attributed their optimism primarily to government-led economic diversification and fiscal policies.
According to the survey, 38.3 per cent of respondents cited economic diversification initiatives as the biggest driver of confidence, while 16.2 per cent pointed to expansionary fiscal measures.
However, firms said rising operating costs continue to pressure business performance.
Energy supply challenges were identified as the biggest operational constraint, with 23.4 per cent of respondents highlighting unreliable electricity as a major concern. Another 16.5% cited global geopolitical tensions as a factor affecting business operations.
The Mining and Quarrying sector recorded the strongest business confidence, posting an index of 42.9 points.
The sector also achieved the highest average capacity utilisation at 58.5 per cent, with nearly 85 per cent of firms indicating plans to expand operations.
Agriculture also improved, with its confidence index rising to 12.2 points from 9.4 points in May.
By contrast, confidence in the Industrial sector declined to 10.9 points from 12.5 points, while the Services sector recorded the weakest performance, with its index falling sharply to 2.9 points.
Overall capacity utilisation across sectors remained largely stable, easing slightly to 55.3 per cent from 55.9 per cent in May.
Although businesses expect stronger sales and higher order volumes in the coming months, they remain reluctant to increase staffing.
The survey projected higher business activity and order inflows in July, with index readings of 13.3 points and 12.8 points, respectively.
However, the Employment Outlook Index remained negative at -8.3 points, suggesting many firms are prioritising cost control over workforce expansion amid high financing costs and economic uncertainty.
Business sentiment differed across Nigeria’s geopolitical zones.
The North-East recorded the strongest confidence level at 29.5 points, followed by the North-West with 19.8 points.
In contrast, sentiment remained negative in parts of southern Nigeria. The South-South recorded -7.9 points, while the South-East posted -9.0 points, reflecting weaker business conditions.
The survey also showed businesses expect the naira to strengthen gradually against the U.S. dollar over the medium term.
However, access to credit remains a significant obstacle. Borrowing indices remained between 20 and 22 points, indicating that high lending rates and tight credit conditions continue to limit investment and expansion plans.
The June survey follows an improvement in business confidence recorded in May, when the BCI rose to 7.9 points from 3.9 points in April.
While businesses remain broadly optimistic about Nigeria’s economic outlook, the latest findings suggest that rising operational costs, energy constraints and limited access to finance continue to slow the pace of recovery and investment.
