High Interest Rates Now Nigeria’s Top Business Concern — CBN Survey Finds
According to the Central Bank of Nigeria’s (CBN) June 2025 Business Expectations Survey, high interest rates have become the most significant threat to Nigerian businesses. The report, released by the CBN’s Statistics Department, indicates that borrowing costs now overshadow other long-standing challenges such as insecurity and inadequate power supply. Businesses across the Agriculture, Industry, and Services sectors voiced growing concern over how elevated interest rates are affecting operations and financial stability.
The survey, which sampled 1,900 companies between June 16 and 20, revealed that interest rates received a constraint index score of 75.6 — higher than insecurity (75.2) and insufficient electricity supply (74.3). This shift highlights the growing pressure from Nigeria’s tightening monetary policy, which is intended to curb inflation but has intensified financing difficulties for businesses. The report suggests that borrowing has become prohibitively expensive for many, making it harder for businesses to expand or even survive.
In addition to high interest rates, the report identified other pressing issues such as high bank charges (73.2), burdensome taxation (68.9), and an unclear economic framework (67.4). The survey also pointed to an unfavourable economic climate (68.7), with poor infrastructure and political instability ranking slightly lower on the list of concerns. These findings signal that businesses are more burdened by economic and financial challenges than political or infrastructural problems at present.
Despite these difficulties, the Business Confidence Index (BCI) stood at 20.7 in June and is expected to rise to 41.3 over the next six months. This cautious optimism is attributed to expectations of improved business conditions and potentially stronger economic performance. However, the optimism is unevenly distributed across the country. The South-East region recorded the lowest confidence score at 4.4, while the North-East, surprisingly, was the most optimistic with a score of 37.1.
Interestingly, many firms also anticipate an appreciation of the naira, even as they brace for further increases in lending rates. The report underscores the difficult balancing act the CBN faces: while higher interest rates may help stabilize the economy and curb inflation, they are also placing serious strain on the real sector. The survey ultimately paints a picture of an economy caught between the need for monetary stability and the urgency of sustaining business growth.
Source: The sun