Nigerian business confidence index drops by 6.6%

The Nigerian business confidence index (BCI) for the first quarter of 2014 has fallen to 11 percent, from 17.6 percent posted in last quarter of 2013.
This represents a 6.6 percent confidence drop, research by the Lagos Chamber of Commerce and Industry (LCCI) has revealed.

Factors that have led to the slump include slower consumer demand, delay in federal budget approval, political realignments, tight credit conditions, adverse public power supply as well as lingering security challenges.

“The drop of the BCI score at this time suggests that business leaders are increasingly waryof some lingering uncertainties in the country. This is a signal that investors are likely going to be softer towards expanding their interest in Nigeria over the next few months”, read the research, conducted by Friday Agenyi, Sunnie Michael and Vincent Nwani of the LCCI, and made available to BusinessDay on Thursday.

The table shows that hotel and restaurant index level dropped to 14 percent, from 37 percent recorded in the first quarter of 2013 and 19 percent obtained in the last quarter of 2013. On the other hand, oil and gas reported a weak confidence level of 4 percent, as against 7 percent recorded in the corresponding quarter of 2013 and 11 percent obtained in the last quarter of 2013.

Finance and insurance reported a strong and positive level of 23 percent, rising from 7 percent obtained in the corresponding quarter of 2013 and 15 percent got in the last quarter of last year.

Professional services BCI dropped from 19 percent generated in the last quarter of 2013 to 10 percent reported in this quarter of 2014. However, this figure still represents an increase of 7 percent, when compared with 3 percent obtained in the corresponding period of 2013.
Distributive trade, which had a 1 percent negative level in the first quarter of 2013, recorded 17 percent positive BCI in this quarter, though this represents a drop when viewed against 23 percent obtained in the Q4 of 2013

In the same vein, agriculture, that had a 1 percent negative level in the first quarter of 2013, recorded 13 percent positive BCI. But this still represents 6 percent BCI decline when compared with what was obtained in the last quarter of 2013.
Moreover, building and construction had 5 percent BCI level, exactly the same figure recorded in the Q4 of 2013. But this is a significant increase in comparison with negative 8 percent level obtained in the corresponding period of 2013. The manufacturing sector recorded negative 10 percent level in this quarter. In the first quarter of 2013, this sector’s level was negative 11 percent while it ended with negative 2 percent in the last quarter of last year.

ODINAKA ANUDU