Industry, Agriculture Most Optimistic on Economy – CBN

Nigeria’s Industry and Agriculture sectors are showing the strongest confidence in the nation’s economic trajectory over the next six months, according to the latest Business Expectations Survey released by the Central Bank of Nigeria (CBN). The report highlights a sharp rise in optimism, with the confidence index for the Industry and Agriculture sectors climbing to 48.3 and 42.8 points respectively—more than double their current levels.

Overall business confidence rose to 20.7 index points in June, reflecting a positive outlook among business leaders on the country’s macroeconomic direction. This upward sentiment is expected to continue, with the confidence index projected to reach 41.3 points over the next half-year.

“All surveyed sectors maintained a positive outlook on the macroeconomy in June,” the report noted, “with the Industry sector recording the highest confidence at 23.1 index points.”

The CBN further observed that optimism is not limited to a single sector. Confidence levels are anticipated to rise across the board, with the Services sector also reporting improved expectations over the short and medium term.

This growing optimism signals a cautious but hopeful sentiment among businesses as they anticipate economic reforms, policy stability, and improved market conditions in the months ahead.

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The Central Bank of Nigeria’s latest report has highlighted the most pressing challenges confronting Nigerian businesses in June 2025. High interest rates (75.6%), insecurity (75.2%), and inadequate power supply (74.3%) topped the list of constraints, reflecting widespread concern over economic and operational pressures affecting profitability and business continuity.

“These findings indicate that businesses are currently more affected by economic and financial issues than political instability,” the CBN noted in its assessment.

The report also pointed to expectations of a stronger Naira against the U.S. dollar in the coming months, supported by a positive outlook in the exchange rate index. However, businesses also anticipate that borrowing costs will rise during the same period.

In a separate release—the Inflation Expectations Survey Report for June—the CBN shed light on the primary inflationary pressures as perceived by households and businesses. Energy costs, fluctuations in the exchange rate, and transportation expenses were named the three leading drivers of inflation.

Conversely, respondents considered factors like natural disasters, middlemen activities, and infrastructure limitations to be less significant in fueling price increases during the review period.

Interestingly, inflationary perceptions appear to be easing. The proportion of respondents who believe inflation remains high fell to 71% in June 2025, down from 75.3% in May. This decline was largely driven by changing sentiments among households, with only 69.5% now perceiving inflation to be high.

Meanwhile, most business participants foresee inflation staying relatively stable in both the short term and over the next three months—a sign of cautious optimism amid ongoing economic adjustments.

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In June 2025, Nigerian consumers showed signs of easing concern over rising prices, particularly in areas such as appliances, consumer durables, savings, education, and investments. According to the Central Bank of Nigeria (CBN), perceptions around price increases in these categories moderated slightly, suggesting a softening of inflationary fears.

Despite this shift, consumers still expect modest price increases in these areas over the next three to six months, though the anticipated hikes are less severe than previously projected.

The overall consumer sentiment for the month registered at -13.2 index points, pointing to continued—though mild—pessimism among households.

Notably, the Economic Condition Index showed signs of improvement, rising to -11.6 index points in June from -12.6 in May. This figure also marked a significant recovery from -30.6 index points recorded back in January, indicating a gradual restoration of consumer confidence in the broader economy.

However, household finances remain a concern. The Family Financial Situation Index held steady at -22.3 index points in June, reflecting a deeper level of pessimism compared to the previous month, and signaling that many families are still under financial strain despite overall improvements in sentiment.

“Family Income sentiment recorded -5.9 index points in June 2025, maintaining about the same pessimistic level (5.7 points) reported in May 2025.”