February 18, 2025/CSL Research
The Central Bank of Nigeria (CBN) has released the Business Expectation Survey (BES) for January 2025, covering three key sectors: Industry, Services, and Agriculture. The survey indicates an overall optimistic outlook for the macroeconomy, with a confidence index of 18.9 points in January 2025. Looking ahead, business confidence is expected to strengthen further. The confidence index is projected at 25.2 points for February 2025, rising to 35.9 points in April 2025, and reaching 43.3 points by July 2025. These indices reflect businesses’ expectations regarding changes in various aspects of their operations in the coming months.
A confidence index above 0.0 signifies positive sentiment toward business activities, while an index below 0.0 indicates a negative outlook.
The survey highlights a positive near-term outlook for business activities. Respondents anticipate a continued appreciation of the Naira, driven by the CBN’s efforts to enhance transparency and stability in the foreign exchange market. The introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024, along with the recent launch of the FX code, has played a crucial role in reducing market volatility.
Furthermore, businesses across all sectors also expressed optimism about job growth and expansion opportunities. However, in January 2025, respondents identified several challenges including, high interest rates, insecurity, and insufficient power supply as the most significant constraints to business operations. Other major challenges included poor infrastructure, an unfavourable economic climate, insecurity, and limited access to credit.
Recent economic data suggests growing business confidence, as reflected in the latest Purchasing Manager’s Index (PMI) from the CBN, which stood at 50.2 points in January 2025, indicating increased output across sectors. While this signals economic recovery, persistent challenges—such as insecurity, high interest rates, multiple taxes, and inadequate power supply—pose significant risks. If not effectively addressed, these issues could hinder achieving targeted economic growth in the medium term.
Click here to read full PDF copy of report
