Market News

BY Nume Ekeghe

The Business Expectation Survey (BES) for February 2025, released by the Central Bank of Nigeria (CBN), has showed that businesses remain optimistic about the macro-economic environment, with a strong expectation that the naira will appreciate in the coming months.

According to the survey, respondent firms foresee a stable and strengthening exchange rate in both the short and medium term. This positive outlook is driven by factors such as improved foreign exchange inflows, tighter monetary policies, and growing investor confidence in Nigeria’s economic recovery.

CBN stated: “Respondent firms expect the Naira to appreciate across all the review periods. They also anticipate that the borrowing rate will rise across all the review periods.”

The confidence index (CI) for the macro economy also reflected this sentiment, with businesses across all sectors—industry, services, agriculture, and construction expressing optimism about economic prospects. The industry sector recorded the highest level of confidence, reflecting positive expectations in manufacturing and trade.

The survey suggested that businesses are reacting positively to recent government and CBN measures aimed at stabilising the foreign exchange market. Increased dollar supply through remittances, export earnings, and external financing support are expected to boost forex liquidity and ease pressure on the naira.

CBN added: “The overall confidence index (CI) on the macroeconomy indicated that businesses were optimistic in February 2025.”

Despite the optimistic exchange rate outlook, businesses highlighted concerns over rising borrowing costs. The report indicated that firms expect interest rates to increase further in both the short and long term.

While businesses remain optimistic, the CBN Consumer Expectation Survey for February 2025 paints a different picture for households. Consumer confidence remains in negative territory, though slightly improved compared to the previous month.

The CBN added: “The general Consumer Outlook shows a reduction in pessimism for February 2025 compared to the previous month. This shift is linked to consumers’ perceptions regarding their family income, economic condition, and family financial situation. Households continue to expect higher costs for essential goods and services, including rent, electricity, telecommunications, and transportation.”

The survey suggested that businesses remain confident about economic stability, expecting continued exchange rate appreciation in the coming months adding, “However, rising borrowing costs and structural challenges such as insecurity and power supply remain areas of concern. In general, survey participants feel that prices for household items, including durable and non-durable goods, are currently elevated.”