High and multiple taxation, insecurity and elevated interest rates remained the biggest challenges facing Nigerian businesses, according to the Central Bank of Nigeria (CBN).
It revealed this in its latest Business Expectations Survey (BES) for June 2026, conducted by the CBN’s Statistics Department with responses from 1,900 businesses with a 96.5 per cent response rate.
The survey found that taxation ranked as the most severe operational constraint nationwide, ahead of insecurity and high borrowing costs, highlighting the persistent pressures on businesses despite expectations of stronger economic conditions in the months ahead.
The report shows that the Overall Business Confidence Index (BCI) stood at 7.2 points in June, indicating that businesses remained positive about the economy, although optimism was moderated by persistent macroeconomic challenges.
According to the report, “positive sentiment was largely underpinned by economic diversification (38.3%) and expansionary fiscal policy (16.2%)”, while cautious views were driven by “ongoing energy-related challenges (23.4%) and elevated geopolitical uncertainties (16.5%)”.
The survey showed that businesses expect conditions to improve further, with the business confidence index projected to rise to 17.6 points in the next month and 30.9 points over the next six months.
READ ALSO:
- Nigerian Stock Market Adds ₦4.52trn in May as Industrial, Insurance Stocks Drive Rally
- Nigeria’s Economic Stability Improves in Q1, but Rising Costs Threaten Outlook — CPPE
- Nigeria Urges ECOWAS Nations to Strengthen Tax Compliance
- Nigeria, Hong Kong Sign Double Tax Treaty to Boost Investment
- Police Linked to Most Civic Rights Violations in Nigeria – WSCIJ
Despite the positive outlook, businesses identified high and multiple taxation as the biggest obstacle to operations, with a national constraint index of 73.7 points.
This ranked above insecurity, which recorded 71.7 points, and high interest rates at 67.0 points. Other major concerns included an unfavourable political climate at 63.5 points and high bank charges at 61.9 points.
The burden of multiple taxation was most severe in the South-East, where businesses recorded the greatest concern with a constraint index of 80.1 points.
The South-South followed with 77.6 points, while the North-Central recorded 76.8 points, all above the national average.
The report also highlighted wide differences in business confidence across sectors.
It shows that mining and quarrying emerged as the most optimistic sector, posting the highest Business Confidence Index of 42.9 points for its own operations.
Agriculture also improved, with its outlook rising from 9.4 points to 12.2 points.
However, confidence weakened in other sectors. The Industry sector’s confidence index fell from 12.5 points to 10.9 points, while the Services sector declined from 4.6 points to 2.9 points.
Average capacity utilisation slipped slightly from 55.9 per cent in May to 55.3 per cent in June, although the report noted that “the Mining & Quarrying sector recorded the highest capacity utilisation in the review month”.
The survey also revealed sharp regional differences in business sentiment.
It indicates that respondents in the North expressed stronger confidence than their counterparts in the South, with the North-East recording the highest level of optimism over the three-to-six-month period.
By contrast, businesses in the South-East and South-South expressed pessimism about current economic conditions, posting negative confidence indices of -9.0 points and -7.9 points, respectively.
Although many businesses plan to expand, the report noted that “employment outlook remains cautious in the near term.”
It added that the mining and quarrying sector recorded the “least optimistic hiring outlook” despite posting a high expansion index of 84.6 points.
On the macroeconomic outlook, businesses expressed confidence that the exchange rate would improve, saying they “anticipate a gradual appreciation of the Naira against the US dollar over the review horizon.”
However, financing conditions are expected to remain challenging, as businesses “expect borrowing rates to remain elevated”, with stable indices pointing to a “moderate increase in borrowing costs over the near- to medium term,” the CBN added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X