Insecurity, high interest rates and multiple taxes were the major factors that weakened business activities significantly in September, the Business Expectations Survey (BES) of the Central Bank of Nigeria (CBN) revealed.

Others include unfavourable economic climate and unclear economic laws, poor access to credit, lack of raw materials and unfair competition. With a sample size of 1,750 business enterprises nationwide, the sectors covered were industry, services and agriculture and while players in the services and agricultural sectors showed a bit of optimism going forward, the industry/manufacturing sector has continued its downward outlook, dropping to -1.6 points.

In comparison, the construction, mining, quarrying, electricity, gas and water supply and non-market services sectors showed optimism at 19.5, 16 and 13.5 points, respectively. The indices are computed based on responses regarding the sentiments of change in different aspects of respondents’ business activities.

The sector with the highest prospect for employment is the industry and manufacturing, followed by the agriculture and services sectors but players have said the constraints they are experiencing currently prevent them from expanding optimally.

The overall confidence index (CI) at 3.2 points indicates that respondent firms expressed optimism about the macroeconomy as they expect business conditions to improve soon. The index improved by 2.3 points compared with what was obtained in the previous month and was largely driven by construction (19.5 points), mining, quarrying, electricity, gas and water supply (16 points), non-market services (13.5 points) and agriculture (2.7 points) sub-sectors.

Similarly, the outlook for next month, the next three months and the next six months all indicated optimism with indices of 6.2, 17.7 and 29.0 points, respectively.

The expected drivers for the optimism on the macroeconomy in the next month are construction (24.4 points), non-market services (18.3 points), mining, quarrying, electricity, gas & water supply (16 points), agriculture (8.8 points) and market services (7.6 points).

The optimism of respondents on the overall business outlook by type of business in the current month was driven by export-oriented businesses (26.9 points), both import and export-oriented, (10 points) and import-oriented (3.2 points).

The overall business outlook for the next month by type of business indicated that all the business types are expected to drive the optimism with export-oriented businesses (11.9 points) being the major driver while the drivers of the optimism on the macroeconomy in the current month, by size of business, are the small and medium firms with 5.2 and 1.5 points.

For the next three months, small businesses are expected to be the major driver of optimism, followed by large,medium and micro businesses. However, for the next six months, the expected driver of the optimistic outlook is large businesses (41.9 points), followed by small businesses (32.8 points), medium businesses (26.9 points) and microbusinesses (20.5 points).

On expansion plans for October 2024, the construction sector shows the highest growth potential, at 68.2 per cent. Firms in the agriculture, mining and quarrying, market services, non-market services and manufacturing sectors indicated strong interest in expanding their operations.