Power Shortages and Insecurity Rank as Primary Challenges for Nigerian Businesses
As businesses in Nigeria gear up for March 2026, they cite power shortages and security issues as their most significant challenges, despite an overall positive outlook regarding the economy. This insight comes from the latest business expectations survey released by the Central Bank of Nigeria (CBN).
The survey revealed that a significant number of respondents, 74.5%, pointed to power shortages as a critical constraint, followed closely by insecurity at 70.9%. Other noteworthy challenges included high and multiple taxes (69.2%), elevated interest rates (66.6%), and various financial issues (64.3%). These factors are seen as detrimental to operational stability and profitability.
Conducted from March 9 to 13, 2026, the survey included responses from 1,900 companies representing the industrial, service, and agricultural sectors, boasting an impressive response rate of 99.7%. Remarkably, despite these challenges, businesses maintain a sense of optimism towards the macroeconomic landscape.
The CBN reported a confidence index of 15.6 points for March, indicative of positive sentiment, although it showed a slight decline from the previous month. Expectations are high for the coming six months, with an anticipated rise in optimism to 43.9 points.
Sectoral analysis illustrated that all industries expressed confidence in the macroeconomic outlook, with agriculture demonstrating the highest level of optimism. This perspective remains positive both in the short and medium term, signaling sustained economic activity.
Regionally, the survey found that the Northeast demonstrated the most optimism with an index of 39.4 points, whereas the Southeast reported a less favorable outlook at -5.5 points. Anticipation for an improved sentiment across all regions is expected in the upcoming months.
In terms of business activity, the report indicated a positive trajectory. Respondents expressed encouraging expectations regarding order volumes, overall business activity, financial stability, and access to credit. Notably, companies have plans to expand employment in April 2026, reflecting anticipations for growth. The mining and quarrying sector reported the most favorable employment outlook, complemented by strong expansion plans in agriculture.
However, the CBN cautioned that structural challenges persist, significantly affecting overall performance. In addition to power shortages and security concerns, companies highlighted high bank fees (63.5%), unfavorable economic conditions (62.0%), uncertain regulatory frameworks (61.6%), and adverse political climates (60.4%) as major constraints.
While access to credit ranked lowest among concerns with an index of 57.7, suggesting that financing is an ongoing challenge, it is perceived as less pressing than other issues. The apex bank emphasized the importance of reforms in these critical areas, stating that enhancing energy supply, improving security, and advancing regulatory and financial environments are crucial for operational stability and profitability.
With respect to exchange rate expectations, respondents anticipated an appreciation of the naira against the US dollar during the survey period. Additionally, businesses expressed a favorable outlook regarding borrowing rates, foreshadowing a potential improvement in the financing landscape.
Capacity utilization across various sectors averaged 52.5% as of March 2026, indicating moderate use of installed capacity. Manufacturing reported 54.4%, agriculture 53.9%, construction 52.7%, while the mining and quarrying sector, alongside electricity and water supply, noted a capacity utilization of 48.9%.
