The Statistics Department of the Central Bank of Nigeria (CBN) disclosed this in its ‘June 2020 business expectations survey’ which was conducted for businesses nationwide indicated that business operators in different sectors showed a lack of trust in the economy.
According to the report, respondent firms expressed pessimism on the macro economy. Respondents’ outlook on the volume of total order, financial conditions (working capital), access to credit and average capacity utilisation all remained negative, but optimistic on the volume of business activities.
“Firms identified insufficient power supply, competition, high interest rate, financial problems, unfavourable economic climate, unclear economic laws, insufficient demand, unfavourable political climate, access to credit and lack of equipment as major factors constraining business activity.” The report stated.
The report further said that the respondent firms expected the naira to depreciate in the current month but appreciate from July to December.
“Inflation level is expected to rise in the next six and 12 months, while the borrowing rate is expected to rise in the current month, next month, next two months and next six months,” it added.
The CBN revealed that the survey was conducted in June with a sample of 1,050 businesses nationwide. A response rate of 96 per cent was achieved, and the sample covered the Agric/Services, Manufacturing, Wholesale/Retail Trade, and Construction Sectors.
The report said the respondent firms were made up of small, medium and large corporations, covering both import-oriented and export-oriented businesses.
At -24.3 index points, the overall confidence index indicated respondents’ pessimism on the overall macro economy in June, it said. Respondents were optimistic in their outlook for July with a confidence index of 31.8.
The report added that they expressed optimism in the overall business outlook in August and December 2020 as shown in a greater confidence of the economy, at 47.4 and 67.8 index points, respectively.
