Survey Reveals Sustained Confidence in Economy

Nume Ekeghe

The Central Bank of Nigeria’s (CBN) Monthly Business Expectation Survey for November 2018, has revealed that businesses are more optimistic about macroeconomic growth.

The report, posted on the central bank’s website also revealed that firms anticipated that the naira would appreciate.

It stated: “At 25.9 index points, respondents’ overall confidence index (CI) on the macro economy in November 2018 was more optimistic when compared to its level of 23.2 index points recorded in October 2018. “The outlook for December 2018 showed greater confidence on the macro economy at 65.6 index points.

“The optimism on the macro economy in the current month was driven by the opinion of respondents from services (14.9 points), industrial (7.8 points), wholesale/retail trade (2.6 points) and construction (0.5 points) sectors, whereas the drivers of the optimism for next month were services (37.0 points), industrial (19.2 points), wholesale/retail trade (6.6 points) and construction (2.8points) sectors.”

Also, in terms of financial conditions and access to credit, the report stated: “Respondents’ outlook on the volume of total order and business activity in November 2018 remained positive as the index stood at 22.1 and 21.7 points, respectively when compared to 17.4 and 18.8 points, respectively recorded in the previous month.

“Similarly, respondents’ outlook on financial conditions (working capital) and average capacity utilisation remained positive with indices of 19.9 and 23.8 index points, respectively Respondents were optimistic on access to credit in the review month with an index of 0.3 points.”

The surveyed firms identified insufficient power supply (64.7 points), high interest rate (57.9 points), unfavourable economic climate (55.1 points), financial problems (51.2 points), unclear economic laws (51.0 points), unfavourable political climate (48.6 points), access to credit (41.3 points) and insufficient demand (41.2 points) as the major factors constraining business activities.

Majority of the respondent firms expected the naira to appreciate in the current as confidence indices stood at 19.4 and 33.2 points, respectively.

“Expectations on respondent firms expect inflation rate to rise in both the current and next months, with confidence indices of 7.0 and 3.4 points for the current and next months, respectively.

“Similarly, respondent firms expect borrowing rates to rise in both current month and next month as the confidence indices stood at 5.8 and 2.2 points, respectively.”