Optimism among Nigerian businesses cooled slightly in June, as firms grappled with rising costs and a shaky macroeconomic backdrop, even as many continued to bet on brighter days ahead.
The Central Bank of Nigeria’s latest Business Expectations Survey shows the Business Confidence Index slipped to 7.2 points last month, down from 7.9 in May, a modest but telling dip that suggests the private sector’s mood is growing more guarded, even if it hasn’t turned outright pessimistic.
Officials at the apex bank were quick to frame the reading as still broadly positive. The CBN’s Statistics Department noted that formal businesses remain upbeat, crediting government reform efforts and diversification drives for keeping sentiment in positive territory despite the headwinds.
What stands out in the survey is the gap between how businesses feel now and how they expect to feel soon. Respondents see the index climbing steadily in the months ahead to 17.6 points by July, more than 24 points over a three-month horizon, and just short of 31 points within six months. It’s a bet on momentum building, even as current conditions remain tough.
Businesses point to two main reasons for that hope: efforts to diversify the economy away from oil, cited by roughly 38% of respondents as their top source of confidence, and expansionary government fiscal policy, named by another 16%.
But the same survey lays bare what’s holding sentiment back today. Nearly a quarter of respondents flagged energy supply shortages as their chief concern, while roughly one in six pointed to geopolitical instability abroad rattling their outlook at home.
Look beneath the national number, and the picture fragments sharply by sector and region.
Mining and quarrying are the standout performers, posting a confidence score of 42.9 points, leagues ahead of every other sector, alongside the highest capacity utilization rate in the survey at 58.5%. Nearly 85% of firms in the sector say they plan to expand operations soon, a level of conviction no other industry comes close to matching.
Agriculture also had a good month, with confidence rising to 12.2 points from 9.4 in May. But elsewhere the story turns gloomier. Industrial sector confidence eased to 10.9 points from 12.5, and services, often a bellwether for consumer-facing demand, fell sharply to just 2.9 points.
Overall capacity utilization across the economy held roughly steady, slipping only marginally to 55.3% from 55.9%.
The regional divide is just as stark. The North-East posted the strongest confidence reading of any geopolitical zone at 29.5 points, with the North-West following at 19.8.
Southern Nigeria tells a very different story: both the South-South and South-East recorded negative confidence scores, at -7.9 and -9.0 points, respectively, a sign that businesses in those regions see conditions actively worsening rather than merely stalling.
Perhaps the most consequential finding for ordinary Nigerians is about jobs. Even as firms expect stronger business activity and fuller order books next month with forward-looking indices of 13.3 and 12.8 points, respectively, they are not planning to hire to meet that demand. The Employment Outlook Index for the coming month sits at -8.3 points, firmly negative.
The message is unambiguous: companies would rather manage costs and preserve capital than expand payrolls, even as they anticipate busier months ahead. Financing constraints and broader uncertainty appear to be doing more to shape hiring decisions than near-term demand expectations.
Access to credit remains a persistent sore point. Private sector borrowing indices are ranging between 20 and 22 points, a level the CBN itself acknowledges reflects elevated lending rates and restrictive credit conditions, a constraint likely to keep a lid on expansion plans through the rest of 2026.
There was a bright spot on the currency front, however. Survey respondents expressed confidence that the naira would appreciate gradually against the U.S. dollar over the medium term, offering at least one area of shared optimism across an otherwise divided economic landscape.
Taken together, the June survey paints a picture of an economy holding its breath, confident in the destination but wary of the road getting there.
Diversification efforts and fiscal support are giving businesses reason to believe brighter months lie ahead, but energy shortages, tight credit, and regional imbalances mean that optimism is far from universal.
For now, Nigerian firms appear focused on weathering the present rather than betting on it, a caution most visible in their reluctance to add to their workforce, even as they brace for busier days ahead.
WHAT YOU SHOULD KNOW
Nigerian businesses are optimistic about tomorrow but cautious about today, and that caution is costing jobs.
Confidence dipped in June (7.2 points, down from 7.9), yet firms expect a strong rebound in the months ahead. But even as they anticipate more orders and busier operations, they’re pulling back on hiring (Employment Outlook Index: -8.3 points).
Tight credit, energy shortages, and sharp regional divides—a thriving North and a struggling South—mean that “confidence” on paper isn’t yet translating into jobs or investment on the ground.
Businesses believe better days are coming, but they’re not confident enough yet to bet on them with new hires.
