Business confidence in Nigeria falls to 8-year low

The Central Bank of Nigeria’s Business Expectation Survey (BES) showed that business confidence in the Nigerian economy, fell by 449 percent to -29.0 points in the fourth quarter of 2016, compared to +8.3% in the same period of 2015, the worst reading since 2008 according to CBN data.

The negative sentiment of businesses operating in Africa’s largest economy was fuelled by power shortages, financial problems, high interest rate, unfavourable economic climate, unclear economic laws, unfavourable political climate, access to credit and insufficient demand.

Additionally, the survey revealed that the average capacity utilisation index fell 184 percent to -8.9 points in Q4 2016 compared with +10.5 points in the corresponding period of 2015.

The CBN’s Q4 2016 report during the period surveyed 1,950 business enterprises nationwide and a response rate of 99.5 percent was achieved during the reporting quarter. The exercise covered the Industry, Construction, Wholesale/Retail Trade and Services sectors.

95% of the businesses surveyed were Small and Medium-scale Enterprises (SMEs).