About 75% of businesses have identified high interest rates as their primary operational constraint in January 2025.
This is according to the Central Bank of Nigeria (CBN)’s Business Expectation Survey for January 2025.
The report, which assesses the economic landscape for businesses across various sectors, highlights key obstacles hampering growth and productivity in Nigeria.
The survey conducted by the CBN identified six major factors that negatively impacted businesses in January 2025:
- High interest rates: 75% of businesses reported this as their primary constraint.
- Insecurity: 74.3% of businesses cited security concerns as a major challenge.
- Insufficient power supply: 73.9% of respondents noted power shortages as a key issue.
- High taxes: 73% of businesses listed excessive taxation as a hindrance to growth.
- Financial problems: 69.3% of businesses faced liquidity and funding difficulties.
- High bank charges: 68.2% of respondents highlighted excessive bank fees as a burden on operations.
The findings reflect the persistent economic challenges affecting businesses across Nigeria, with financial burdens, infrastructural issues, and security concerns ranking as major obstacles.
The CBN Business Expectations Survey (BES) is a monthly survey of leading firms drawn from Business Establishment updated frames of Central Bank of Nigeria and the National Bureau of Statistics.
The January 2025 Business Expectations Survey (BES) was conducted from January 13 to 17, 2025 with a sample size of 1,900 business enterprises across Nigeria. The survey achieved a response rate of 99.7%, covering three key sectors: Industry, Services, and Agriculture.
Sectorial Performance: Mining and Quarrying Leads
The economy’s overall capacity utilization was at 56.8% according to the apex bank for the month of January 2025.
- 1. Despite these challenges, the report noted that the Mining and Quarrying sector recorded the highest capacity utilization for January 2025, reaching 60.3%.
- 2. This indicates that businesses in this sector were able to leverage available resources and opportunities better than others amid economic uncertainties.
Respondent firms were optimistic that the volume of business activity in February, April and July 2025 would be favorable according to the report.
Implications for the Nigerian Economy
The CBN Governor Olayemi Cardoso has implemented multiple interest rate hikes in an effort to curb inflation.
- 1. The Monetary Policy Rate has been raised by a total of 875 basis points in 2024, moving from 18.75 per cent at the start of the year to 27.50 per cent by November.
- 2. The persistent high-interest rate environment has made borrowing expensive, limiting expansion and investment opportunities for businesses. Insecurity continues to pose a significant threat, particularly in northern Nigeria and rural areas where kidnapping, banditry, and insurgency disrupt commercial activities. Additionally, erratic power supply has driven up operating costs for businesses relying on alternative energy sources.
The high taxation and financial burdens, including excessive bank charges, further compound the difficulties businesses face in achieving sustainable growth.
