Nigerian businesses are demonstrating surprising optimism, according to the latest findings from the Central Bank of Nigeria (CBN), even as they navigate challenges like taxes and insecurity. This enduring spirit defines the commercial landscape of cities like Lagos, where aspiration hums despite daily pressures.
Despite grappling with some of the highest taxes and persistent insecurity, a surprising thread of optimism weaves through the nation’s formal enterprises, according to the CBN’s Business Expectations Surveys.
The enduring pulse of business confidence
The June 2026 survey, conducted between June 8 and 12, painted a picture of resilience, with the Business Confidence Index (BCI) standing at 7.2 points. While this shows a slight moderation from the previous month, it’s a clear signal that Nigerian entrepreneurs are still looking to the future with a belief that things will improve, echoing a historical pattern of perseverance.
The CBN’s comprehensive surveys, gathering insights from 1,900 business enterprises across various sectors, offer a crucial snapshot of economic sentiment. The high response rates — 99.5% for the May survey and 99.4% for April — underscore the depth and reliability of these findings.
May 2026 saw the BCI climb to 7.9 points, a notable improvement from previous months, with optimism stretching across all sectors. Back in February 2026, the BCI was at a robust 39.4 points, with firms expecting it to rise even further to 54.3 points over the next six months.
The iron chains: taxation and insecurity
But this optimism isn’t born of ignorance; it flourishes in spite of crushing obstacles. For Nigerian businesses, the enemy isn’t abstract. It has names: high and multiple taxation, cited by a staggering 73.7% of respondents in June 2026 as their most severe constraint. Insecurity followed closely, impacting 71.7% of enterprises.
These aren’t new complaints. In May, insecurity led the list at 72.9 points, with taxes not far behind at 70.3 points. The echoes stretch back to February, where insecurity hit 71.1 index points and taxes 70.7 index points, revealing a persistent, grinding burden that has shaped the business landscape for years.
Beyond these top two, a cascade of other issues continues to stifle growth. High interest rates plagued 67.0% of businesses in June, while an unfavorable political climate concerned 63.5%. High bank charges were a problem for 61.9% of firms, eating into already thin margins.
Poor infrastructure remained a constant battle for 58.5%, and financial constraints weighed on 58.2% of businesses, making access to capital a perpetual struggle.
Glimmers of hope: diversification and policy shifts
So what keeps the fire burning? In June 2026, 38.3% of businesses found their positive sentiment rooted in economic diversification efforts, a long-held national ambition. Another 16.2% pointed to expansionary fiscal policy measures as a source of their hope.
The perceived easing of governance and policy-related concerns, coupled with ongoing progress in diversification, also played a part in May’s improved sentiment. It suggests that businesses are acutely aware of policy shifts, even incremental ones, and they respond to them.
Optimism is not confined to a single corner of the economy. The industrial sector recorded a confidence index of 12.5 points in May, and services improved from 1.5 points in April to 4.6 points. The agriculture sector saw its confidence jump sharply from 2.7 points to 9.4 points, a significant move for a foundational part of the economy.
Mining and Quarrying emerged as a consistent frontrunner, posting the strongest expansion outlook at 69.2 points in May. This points to targeted growth or improved operational conditions in these critical resource sectors, offering a tangible reason for optimism.
Nigeria’s economic crossroads: lessons from the past
The current business environment in Nigeria can’t be understood without looking at the seismic shifts of the recent past. President Bola Tinubu’s decision in May 2023 to remove the fuel subsidy, which became effective July 1, 2023, sent shockwaves across the country.
Pump prices soared by 167%, leaping from NGN185 to between NGN350 and NGN550 per liter. This single act ignited inflationary pressures and hiked transportation costs, impacts still acutely felt by every Nigerian and every business today.
Then came the naira’s dramatic fall in 2024, depreciating by 70% and hitting lows of NGN1,681 per United States dollar officially, and nearly NGN1,800 on the parallel market. This currency freefall crippled businesses reliant on imports, driving up production costs and decimating profit margins, forcing many to re-evaluate their presence in the market.
Further adding to the tax burden were the reforms introduced by the Nigeria Tax Act 2025, signed into law by President Bola Ahmed Tinubu on June 26, 2025, with an effective date of January 1, 2026. These reforms included the renaming of the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS), granting it expanded powers for automation and enforcement.
Under these new laws, the Capital Gains Tax (CGT) rate for companies surged from 10% to 30%. Multinational companies with global revenues exceeding €750 million now face a minimum effective tax rate of 15% on profits from Nigerian operations, complete with a top-up tax if they fall short of this threshold.
The CBN steers through turbulent waters
Guiding Nigeria’s monetary policy through these turbulent times is Governor Olayemi Cardoso, who assumed leadership of the Central Bank of Nigeria on October 5, 2023. His appointment by President Tinubu in September 2023 followed nearly three decades of experience in commercial banking, including his role as Chairman of Citibank Nigeria Ltd.
The CBN’s core mandate remains steadfast: ensuring monetary and price stability, issuing currency, and fostering a sound financial system. Cardoso’s recent recognition in London, where he received the Central Bank of the Year Award in June 2026, signals international acknowledgment of the CBN’s commitment to institutional reform.
Firms are expecting business activity to pick up further in June, August, and November 2026. There’s a cautious hope that the naira will see a gradual appreciation against the US dollar. However, borrowing costs are expected to remain high, a deliberate strategy by the CBN to tame inflation.
Employment expectations remained negative across all sectors in May 2026, reflecting a careful approach to hiring, although businesses did anticipate adding more workers in March 2026, especially in the construction sector. Nigeria’s real GDP growth, which slowed to 2.9% in 2023, underscores the challenging economic backdrop against which this cautious optimism plays out.
The persistent optimism of Nigerian businesses, despite the relentless headwinds of taxation, insecurity, and volatile economic reforms, isn’t just a statistic; it’s a living testament to the nation’s indomitable entrepreneurial spirit. This deeply ingrained resilience, a thread running through our history, continues to challenge policymakers today: to build an environment where such inherent drive can truly flourish, transforming potential into undeniable progress for everyone.
