Businesses across Nigeria have identified high interest rates as the single most pressing constraint to their operations in June 2025, surpassing even insecurity and chronic power supply issues, according to a new report by the Central Bank of Nigeria (CBN).
The data, contained in the June 2025 edition of the Business Expectations Survey (BES), reveals that firms gave high interest rates a constraint index score of 75.6, ahead of insecurity (75.2) and insufficient power supply (74.3).
The BES, conducted between June 16 and 20 by the apex bank’s Statistics Department, surveyed 1,900 firms across various sectors, including Industry, Agriculture, and Services.
“Respondents identified High interest rate (75.6), Insecurity (75.2) and Insufficient power supply (74.3) as the top three business constraints in June 2025, highlighting concerns around factors that directly impact operational stability and profitability,” the CBN noted in the report.
The findings show growing frustration among businesses over the elevated cost of borrowing. While insecurity and poor electricity have long been recognised as structural impediments to Nigeria’s economic growth, the emergence of interest rates as the number one concern reflects how tightening monetary policy is biting harder on corporate finances.
This concern is surfacing at a time when the CBN has kept benchmark interest rates high in a bid to tame inflation and stabilise the naira. However, for many businesses—particularly small and medium-sized enterprises—the trade-off has been steep as it triggered expensive credit and tighter cash flows.
Other major hurdles mentioned by respondents include high bank charges (73.2), high taxes (68.9), an unfavourable economic climate (68.7), and unclear economic laws (67.4).
Meanwhile, issues like poor infrastructure (62.4) and an unfavourable political climate (62.5) ranked slightly lower, suggesting that economic and financial constraints are currently more acute than political instability.
The report noted, “This suggests that business constraints are more focused on economic and financial risks than political challenges in the review period.”
Despite these challenges, the survey indicated an optimistic outlook among firms for the near term. The Business Confidence Index (BCI) for June stood at 20.7, and is projected to rise steadily to 41.3 over the next six months. According to the CBN, this optimism is largely driven by expectations of increased business activity and improved operating conditions in the coming quarters.
Nevertheless, confidence levels remain uneven across regions. The South-East recorded the lowest optimism score at 4.4, which the report attributes to the acute impact of high interest rates in that region. In contrast, firms in the North-East posted the highest level of confidence at 37.1.
The survey also revealed that businesses expect the naira to appreciate in the coming months, even as they brace for further increases in borrowing costs.
The CBN is currently having its Monetary Policy Committee (MPC) meeting. Analysts and market watchers are closely monitoring developments in the fiscal and monetary landscape.
Some analysts believe the Bank will hold the Monetary Policy Rate at 27.5% for a third consecutive time, given the delicate balance between supporting price stability and not stifling growth.
However, a few analysts are forecasting a mild rate cut to 27.25%, alongside a possible adjustment to the asymmetric corridor, as a signal of the Bank’s intent to calibrate policy gradually in response to evolving macroeconomic conditions.