CBN Report Identifies Power As Major Problem Of Nigerian Businesses

The Central Bank of Nigeria, CBN May 2019 Business Expectations Survey Report has established inadequate power supply, high-interest rate and a difficult economic environment among the major problems of Nigerian businesses in the outgoing month.

The May 2019 report conducted by the CBN nevertheless projected expectations of expansion in the construction industry in the near future. The report posted on the CBN website over the weekend also saw businesses project an increase in the value of the naira in the month ahead.

In the ranking of the challenges facing businesses, inadequate power supply was 69.3 points; high interest rate 56.4 points; unfavourable economic climate 55.2 points; financial problems 54.3 points; unclear economic laws 51.7 points; unfavourable political climate 48.3 points; insufficient demand 45.4 points; access to credit 44.4 points; competition 44.0 points; and lack of equipment 33.1 points.

“Majority of the respondent firms expect the naira to appreciate in the current month, next month and next 12 months as their confidence indices stood at 28.5, 40.1 and 50.1 index points, respectively.

“Respondent firms expect borrowing rates to rise in the current and next months, as well as in the next 12 months as the confidence indices stood at 3.7, 2.4 and 6.9 points, respectively.”

The survey was carried out between May 6 and 10, 2019 among 1,050 businesses in services, industrial, wholesale/retail, construction across the country.

The optimism on the macro economy came majorly from services with 15.7 points with construction having only 1.4 points.

“The positive outlook by type of business in May 2019 were driven by businesses that are neither import- nor export-oriented (20.8 points), both import- and export-oriented (5.3 points), import-oriented (3.0 points), and those that are export-related (0.7 points).

“All sectors expressed optimism on own operations in the review month. Respondents from the services sector expressed the greatest optimism on own operation with an index of 8.7 points, followed by the industrial sector with 3.0 points, the wholesale/retail trade with 0.8 points and the construction sector with 0.1 points, respectively,” the May BES report averred.

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