Stakeholders in industry, services and agriculture sectors have expressed optimism that the Nigerian economy is on the path to recovery, the July 2024 Business Expectations Survey (BES) of the Central Bank of Nigeria (CBN) insists.
The survey was carried out between July 15 and 19, with a sample size of 1,600 business enterprises drawn from different parts of the country.
According to the study, respondents’ outlook for the next month, three months as well as six months indicated rising optimism.
The CBN study outcome is contrary to last month’s purchasing managers’ index of Stanbic IBTC, which pointed to low confidence.
The CBN survey noted that the positive outlook in the volume of business activities of the firms in the next month implies improved prospects for employment in the same period.
It identified the agriculture sector, industry and services sectors as the highest prospects for employment generation.
“The respondent firms opined that insecurity was the major factor constraining the business activity in July 2024. Other constraining factors are high interest rates, insufficient power supply, and high/multiple taxes. Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under review. Respondents also opined that the current inflation rate of 34.19 is too high,” it stated.
On the confidence index, the survey noted that few respondent firms expressed optimism about the macroeconomic condition as they expect business conditions to improve in July 2024.
The index, however, dropped by three index points when compared to the level obtained in the previous month.
The optimism in July 2024 was driven by the opinion of respondents from the mining, quarrying, electricity, gas and water supply followed by the agriculture sector and market services.
Similarly, the outlook for August, the next three months, and the next six months all indicated optimism with 7.6, 19.3, and 30.7 points, respectively.
The expected drivers for the optimism on the macroeconomic condition in the next month are mining, quarrying, electricity, gas and water supply (35.3 points), agriculture (9.9 points), market services (7.8 points), manufacturing (6.3 points) and non-market services (4.8 points).
The report said businesses that are ‘neither importer nor exporter’ and ‘importer’ were pessimistic as indicated by -4.5 points and -2 points.
The expected drivers for the optimism on the macroeconomic condition in the next month are mining, quarrying, electricity, gas and water supply (35.3 points), agriculture (9.9 points), market services (7.8 points), manufacturing (6.3 points) and non-market services (4.8 points).
