CBN Survey Shows Optimistic, Jobs Outlook Stays Negative

Business confidence in Nigeria improved broadly in May 2026, with firms across agriculture, industry, and services reporting more positive expectations for the coming months, even as they flagged insecurity, multiple taxation, and high interest rates as the three most serious constraints on their operations, according to the Central Bank of Nigeria’s latest Business Expectations Survey released this week.

The survey, which covers companies across all major sectors of the economy, showed that firms expected stronger business activity over the coming months and anticipated a gradual appreciation of the naira against the dollar. Companies in the mining and quarrying sector recorded the strongest expansion outlook at 69.2 points, followed by construction and agriculture. Overall average capacity utilisation stood at 55.9 per cent in May, slightly below 56.0 per cent in the previous month, suggesting marginal stability in production activity.

However, employment sentiment remained the most notable weak spot in an otherwise improving survey. Companies across all sectors indicated plans to slow or reduce hiring in the near term despite reporting better business conditions. The disconnect between improving business outlook and negative jobs expectations reflects the continued uncertainty businesses feel about the sustainability of current conditions.

Insecurity Tops List of Business Constraints

Insecurity emerged as the most frequently cited constraint on business activity, reflecting the wave of kidnappings, bandit attacks, and community disruptions that have affected supply chains, worker safety, logistics, and agricultural production across multiple regions. Businesses said the security environment was raising their operating costs through the need for private security, alternative logistics routes, and heightened insurance premiums.

Multiple taxation and high interest rates ranked second and third respectively as business constraints. The CBN’s Monetary Policy Rate remains at 27 per cent following the May 20 MPC meeting, maintaining elevated borrowing costs for businesses seeking credit. The Centre for the Promotion of Private Enterprise separately warned against prolonged monetary tightening and rising reliance on foreign portfolio inflows, saying structural trade and investment improvements were needed to sustain Nigeria’s improving external position.

Furthermore, the negative employment outlook is a politically significant finding given that job creation was one of the central promises of the Tinubu administration’s Renewed Hope Agenda. Still, government officials said employment gains typically lag improvements in business confidence and investment, and that job creation would accelerate as the reform programme delivered more consistent results. Notably, the IMF’s projection of 4.49 per cent economic growth for Nigeria in 2026 and 4.1 per cent for the full year suggest that the macroeconomic trajectory is broadly positive. Consequently, the central challenge for the administration is to translate improving macro indicators into tangible employment and income gains for ordinary Nigerians before the 2027 election.

Foreign VAT Collections Signal Revenue Progress

Meanwhile, Nigeria’s foreign VAT collections rose 83 per cent year on year to N830.47 billion in the first quarter of 2026, reflecting stronger enforcement of VAT obligations on digital service providers operating in the Nigerian market. In addition, the FG raised N4.68 billion through June 2026 savings bonds, signalling continued retail investor interest in government securities. As a result, Nigeria’s revenue diversification efforts are delivering incremental gains across multiple streams simultaneously.