LAGOS, Nigeria — Business confidence in Nigeria improved in May 2026, with the Business Confidence Index (BCI) rising to 7.9 points from 3.9 index points in April, despite persistent challenges including insecurity, high borrowing costs, and multiple taxation.
Okay News reports that the improvement was disclosed in the latest Business Expectations Survey released by the Central Bank of Nigeria (CBN), which attributed the rise in sentiment to improved perceptions of government policies and progress in economic diversification.
Easing governance and policy-related concerns drove 15.7% of the improvement in sentiment, while progress in economic diversification accounted for 15.6%. Businesses identified energy-related challenges (26.7%) and geopolitical uncertainties (7.7%) as key factors dampening confidence.
All major sectors maintained positive expectations for the current month. Agriculture rose from 2.7 to 9.4 index points, services improved from 1.5 to 4.6, and industry increased from 8.8 to 12.5.
The Mining and Quarrying sector recorded the strongest outlook for business operations at 63.6 index points and the highest expansion outlook at 69.2 points. All sectors expressed caution regarding employment conditions, with the non-market services sector reporting the weakest hiring expectations.
Businesses identified insecurity (72.9), high and multiple taxes (70.3), high interest rates (67.7), unfavourable political conditions (64.2), and high bank charges (64.1) as the top five business constraints. Financial challenges (59.7) and poor infrastructure (58.2) also featured among the top ten obstacles affecting business operations.
Regionally, most areas expressed optimism for future economic conditions, although the South-East remained cautious in its outlook for the next month. Over the three- and six-month periods, all regions reported positive expectations, with the North-East emerging as the most optimistic.
Respondents expect the naira to gradually appreciate against the United States dollar over the review period, while businesses anticipate borrowing costs will remain elevated despite improvements in other economic indicators. Average capacity utilisation eased slightly from 56.0% to 55.9%.
The Nigerian Economic Summit Group stated in its May 2026 report that Nigeria’s business environment recorded a modest improvement. The National Bureau of Statistics (NBS) reported that Nigeria’s economy recorded real Gross Domestic Product (GDP) growth of 3.89% year-on-year in the first quarter of 2026, with nominal aggregate GDP rising to N110.79 trillion from N94.05 trillion in Q1 2025, representing nominal year-on-year growth of 17.79%.
