Nigerian Firms Expect Naira Gains as Tax and Insecurity Remain Top Concerns

Businesses in Nigeria expect the naira to make modest gains against the US dollar over the coming months, even as they continue to cite taxation, insecurity and high interest rates as major operating pressures. Business Post, reporting on the Central Bank of Nigeria’s September Business Expectations Survey, said the findings point to improving sentiment alongside persistent costs.

The survey’s Business Confidence Index stood at 13.4 points in September. Respondents attributed their optimism chiefly to increased demand, cited by 29.3 per cent, economic diversification at 18.9 per cent and improved access to finance at 13.5 per cent.

High or multiple taxation ranked as the most prominent constraint at 67.1 index points. Insecurity followed at 66.2 points and high interest rates at 64.3. Businesses also identified political conditions and bank charges, at 61.8 and 61.5 points respectively.

Sentiment improved most in the industry sector. Businesses across regions reported positive near-term expectations except in the South-East; respondents in the North-East were the most optimistic across the survey’s forecast periods.

The survey records business expectations; it does not guarantee that the naira will strengthen. The results show confidence improving alongside persistent operating costs and security concerns.