Nigerian businesses project naira’s rise, spike in inflation , borrowing rates - BUSINESS POST
BY Moses Obajemu
Businesses enterprises in the small and medium sale as well as large organizations have projected that the naira would appreciate in the current and next months; and inflation and borrowing rates to rise in both the current month and next months.
Similarly, they have identified insufficient power supply, high interest rate, unfavourable economic climate, financial problems, unclear economic laws, and insufficient demands as some of the factors that impeded their operations in November 2018.
These are the highlights of a business expectation survey carried out 1050 businesses nationwide by the Central Bank of Nigeria (CBN) between November 12 and 16, 2018.
According to the CBN survey, the respondents were made up of small, medium and large companies covering both the export and import oriented businesses. They are also spread across the services, industry, wholesale, retail and construction sectors.
The respondents, according to the survey report released by the CBN, expected the naira to appreciate in the current and next months; and inflation and borrowing rates to rise in both the current month and next months.
“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 businesses’ outlook for December 2018 showed greater confidence on the macro economy at 65.6 index points “, the report said.
On employment and expansion during the review period, the report projected a positive outlook in the volume of business activities, with 70.1 index points, and employment at29.2 index points, which indicated a favourable business outlook in the next month.
The report said the employment outlook index by sector showed that the wholesale/retail trade with 32.2 points, indicates the highest prospects for creating jobs, followed by services (31.2 points) , industrial sector (26.6 points) and construction sector with 17.5 points
On financial condition and access to credit, the survey revealed that 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 utilization remained positive with indices of 19.9 and 23.8 index points, respectively.