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Multiple taxation ranked as the biggest constraint for Nigerian businesses in September, followed by insecurity and high interest rates.
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Business confidence remained positive at 13.4 points despite persistent operating pressures.
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Firms cited stronger demand, economic diversification and access to finance as the main factors supporting their outlook.
October 05, (THEWILL) – Nigerian businesses continued to face significant operating pressures in September, with multiple taxation, insecurity and high interest rates emerging as the leading constraints on business activity, according to the Central Bank of Nigeria (CBN).
The findings were contained in the apex bank’s latest Business Expectations Survey, which showed that while firms remained concerned about several aspects of the operating environment, overall business sentiment stayed positive during the month.
The Business Confidence Index stood at 13.4 points in September, indicating that businesses remained optimistic about the operating environment despite the challenges confronting their operations.
Firms also expected conditions to improve over the coming months, with stronger demand, economic diversification and improved access to finance identified as key factors supporting the positive outlook.
Tax Burden, Insecurity Top Business Constraints
Tax-related pressures emerged as the most significant concern among businesses surveyed by the CBN.
High or multiple taxation recorded 67.1 index points, placing it ahead of insecurity and high interest rates.
Insecurity ranked second with 66.2 points, while high interest rates recorded 64.3 points, highlighting the combined pressure of tax obligations, security risks and the cost of borrowing on business operations.
Other major constraints identified by respondents included an unfavourable political climate, which scored 61.8 points, and high bank charges at 61.5 points.
Competition recorded 60.2 points, while unclear economic laws and an unfavourable economic climate each scored 58.7 points.
Financial constraints recorded 57.5 points, while poor infrastructure ranked lowest among the 10 major constraints identified by respondents, with 55.0 points.
The findings indicate that although infrastructure remains a longstanding challenge for Nigerian businesses, firms currently view taxation, insecurity and borrowing costs as more immediate pressures on their operations.
The persistence of elevated interest rates could also weigh on investment and expansion decisions, particularly for businesses that rely on bank financing for working capital, expansion and new projects.
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Demand, Diversification Support Positive Outlook
Despite the operating challenges, businesses maintained a positive outlook during September.
The CBN said respondents attributed their optimism primarily to increased demand, economic diversification and improved access to finance.
Increased demand accounted for 29.3 percent of the factors supporting the positive outlook, followed by economic diversification at 18.9 percent and access to finance at 13.5 percent.
The industry sector recorded the greatest improvement in sentiment during the month, suggesting that businesses in the sector were becoming more confident about their operating conditions and prospects.
Businesses also remained optimistic about the naira, with respondents expecting the currency to record modest gains against the US dollar across the various forecast periods.
Regional sentiment was broadly positive, although the CBN identified a notable exception.
Businesses across most regions expressed optimism about the macroeconomic outlook for the coming month, while the South-East was the only region that did not share the positive near-term outlook.
The North-East emerged as the most optimistic region across the forecast periods.
The survey presents a mixed picture of the business environment: firms continue to contend with high costs and risks, particularly taxation, insecurity and expensive credit, but their expectations for demand, economic activity and financing conditions remain positive.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
