Business Confidence Grows in August, But Taxes and Insecurity Remain Big Issues

Business confidence among formal-sector companies in Nigeria increased in August 2026. The Business Confidence Index (BCI) rose to 14.8 points from 5.7 points in July, according to a survey by the Central Bank of Nigeria (CBN).

This rise shows that businesses feel more positive, as noted in the CBN’s August 2026 Business Expectations Survey (BES). The bank's Statistics Department, Economic Policy Directorate released the survey.

The survey found that respondents felt more positive mainly due to rising demand, economic diversification, and the current monetary policy. These factors had indices of 25.9 percent, 18.3 percent, and 14.2 percent, respectively.

Businesses also feel hopeful about the future. The survey predicts that the confidence index will go up to 23.6 points in September and 30.1 points in November 2026. By February 2027, it is expected to rise to 36.1 points.

The CBN reported that the overall business outlook was positive across all sectors in August.

Sector Performance

The Industry sector showed significant growth in confidence. Its index jumped from 11.5 points in July to 17.1 points in August.

The Services sector also saw improvement, rising from 3.6 points to 13.3 points. The Agriculture sector increased from 3.4 points in July to 13.9 points in August.

The survey indicates that the outlook for the next six months remains strong. Confidence levels in all three sectors show positive feelings.

For specific sectors, the Electricity, Gas and Water Supply sector had the highest business confidence at 50.0 points. The Construction sector is expected to expand the most in September, with an index of 73.9 points.

The Mining and Quarrying sector showed the highest capacity utilization for August, sitting at 58.1 percent.

Major Concerns: Taxes and Insecurity

Even with the rise in business confidence, respondents pointed out that taxes, insecurity, and high borrowing costs are still major challenges.

High or multiple taxation was seen as the biggest issue in August, scoring 67.8 points. Insecurity followed closely at 66.9 points, and high interest rates came in at 63.5 points.

Other significant challenges included high bank charges, which scored 61.1 points, and competition, which had 59.5 points.

Unclear economic laws and an unfavorable economic climate both recorded 57.7 points. Moreover, an unfavorable political climate and poor infrastructure scored 56.3 and 55.7 points, respectively.

The survey clearly shows that multiple taxation, insecurity, and high interest rates remain the main problems for businesses.

The CBN stated that respondents expect a slight strengthening of the naira against the US dollar over the review periods, with indices remaining positive.

However, businesses think borrowing rates will stay high in the coming months. Borrowing-rate indices are between 18-19 points, indicating a slight drop in borrowing costs may happen soon.

In July, the CBN kept the benchmark interest rate at 26.5 percent, sticking to a careful monetary policy due to inflation pressures. Nigeria’s headline inflation fell to 15.43 percent in that month.

The survey also indicated that business activity is expected to pick up in September and November 2026, with more improvements expected in February 2027.

Employment expectations for September are low across most sectors. The Electricity, Gas and Water Supply sector showed neutral hiring sentiment at 0.0 index point.

Regional Differences

The overall economic outlook for August showed different feelings across regions, according to CBN data.

Respondents from the northern part of Nigeria reported stronger confidence than those from the south. Still, businesses in all sectors were optimistic about their operations during this period.

The survey stated that all sectors also showed hope for the overall economy.

The Business Expectations Survey is a monthly check of leading firms from the CBN and the National Bureau of Statistics.

This survey gives insight into how businesses feel about economic activity. The CBN mentioned that its BES method was improved in April 2026. The change switched the weighted diffusion index from a three-point scale to a five-point scale, allowing for better reporting of how respondents feel.