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A Central Bank of Nigeria (CBN) Business Expectation Survey for January 2025 has shown that about three-quarter of Nigeria’s businesses have identified high interest rates as their primary operational constraint in the past month.

The report, which assesses the economic landscape for businesses across various sectors, highlights key obstacles hampering growth and productivity in the country. The survey, conducted by the CBN, identified six major factors that negatively impacted businesses in January 2025.

They include: high interest rates which 75 per cent of businesses reported as their primary constraint. This is closely followed by insecurity, which 74.3 per cent of businesses rated as a major challenge.

Others are insufficient power supply, 73.9 per cent; high taxes 73 per cent; financial problems 69.3 per cent and high bank charges 68.2 per cent.

The findings reflect the persistent economic challenges affecting businesses across Nigeria, with financial burdens, infrastructural issues and security concerns ranking as major obstacles.

Read Also: Nigeria’s foreign reserves hit $40bn as CBN strengthens forex market

The CBN Business Expectations Survey (BES) is a monthly survey of leading firms drawn from business establishment updated frames of CBN and the National Bureau of Statistics (NBS).

The January 2025 BES was conducted from January 13 to 17, 2025 with a sample size of 1,900 business enterprises across Nigeria. The survey achieved a response rate of 99.7 per cent, covering three key sectors as industry, services, and agriculture.

The economy’s overall capacity utilisation was at 56.8 per cent according to the apex bank for the month of January 2025. Despite these challenges, the report noted that the Mining and Quarrying sector recorded the highest capacity utilisation for January 2025, reaching 60.3 per cent.

 This indicates that businesses in this sector were able to leverage available resources and opportunities better than others amid economic uncertainties.

Respondent firms were optimistic that the volume of business activity in February, April and July 2025 would be favorable according to the report.

The Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) is likely to maintain the current interest rates in its upcoming meeting, the Managing Director and CEO of Coleman Wires and Cables Industries Limited, Mr. George Onafowokan, has projected.

Onafowokan, who spoke on the state of the economy, noted that while a slight reduction of 0.25 per cent might be possible, the MPC is expected to focus on maintaining stability rather than making drastic changes.

According to him, “The economy is already struggling with high interest rates. The impact of a 27.5 per cent Monetary Policy Rate (MPR) translates to commercial interest rates ranging between 35 per cent and 38 per cent, which is unsustainable.”

He explained that businesses currently face the challenge of servicing expensive loans, where borrowing N1,000 requires generating over N350 to N380 just to cover interest costs, without considering profit or operational expenses.

The Coleman Wires CEO emphasised the need for policies that stabilise the economy to gradually reduce inflation, which would then allow for a decline in interest rates over time.

Onafowokan further stated that Nigeria’s business and industrial sectors expect the government to prioritise industrial growth, especially with preparations for the next election cycle beginning in 2025.

He commended the Federal Government’s recent efforts, including the appointment of a Minister of State for Industry, who has been engaging with stakeholders to understand the challenges facing local manufacturers.

He urged the government to implement a comprehensive fiscal policy for the industrial sector, emphasizing that such a policy would address high tariff costs affecting raw materials and finished goods.

He stressed the importance of strengthening local content policies across various industries, including power transmission, telecommunications, general construction, and building materials, to drive national economic growth.

Read Also: Investors, businesses differ as CBN takes inflation battle to MPC

On the foreign exchange market, Onafowokan expressed optimism about the recent stability of the naira, which has enabled businesses to plan better and make informed investment decisions.

He, however, maintained that further stability is needed to lower inflation and, consequently, reduce interest rates—a key challenge for businesses in Nigeria.

Sharing his perspective on government’s directive to the Nigeria Customs Service (NCS) to increase revenue generation, Onafowokan warned against using customs solely as a revenue-generation tool.

He argued that excessive tariffs and import duties could stifle businesses by raising production costs, ultimately leading to higher consumer prices. Instead, he called for a balanced approach that ensures customs policies support industrial growth while maintaining fiscal discipline.

As the MPC meeting approaches, industry players will be closely watching the CBN’s decision on interest rates, as businesses continue to grapple with economic pressures.

At 34.8 per cent in December, rising inflation is one major reason investors expect the Monetary Policy Committee (MPC) to raise interest rates at its 299th meeting slated for February 19th and 20th. But real sector operators think otherwise. They want the MPC to hold rates, and begin gradual relaxation of monetary policy tightening measures to reduce high cost of credit, reports Assistant Editor COLLINS NWEZE

Fighting inflation in an import-dependent economy like Nigeria is never a simple task. The need to tame inflation and sustain exchange rate stability will form part of the key decisions to be taken by the Monetary Policy Committee (MPC) members at their meetings next week.

Although inflation remains a significant challenge, with consumer prices reaching 34.80 per cent in December, the Central Bank of Nigeria (CBN’s) aggressive tightening, which raised the monetary policy rate (MPR) by a cumulative 875 basis points to 27.50 per cent in 2024, was a move to anchor inflation expectations. February 19th and 20th present yet another opportunity for the CBN-led MPC to decide on Nigeria’s macroeconomic future. The committee will decide on what its priorities are, including whether to hold or hike in the monetary policy rate (MPR), going by current trends.

Already, businesses, especially real sector operators, want the MPC to have a rethink and keep rates on hold to reduce surging cost of borrowing but most investors believe the rates should be raised slightly to keep inflation on check. So, the next MPC meetings put the committee members in a dilemma, and decisions they take will definitely shape the economic landscape of the country. The last MPC meeting held in November 2024 saw the committee members raising interest rate by 25 basis points to 27.50 per cent. The benchmark interest rate was previously pegged at 27.25 per cent in September 2024. The Governor of CBN, Olayemi Cardoso, said: “The Committee was unanimous in its agreement to raise the monetary policy rate by 25 basis points to 27.50 per cent.” Cardoso noted that the decision to raise the country’s MPR is to tackle inflation and promote exchange rate stability.

Speaking on expectations from the MPC members at next week’s meeting, the Research Head, Cowry Asset Management Limited, Charles Abuede, said the MPC should, at its next meeting, tread cautiously, though with a hawkish bias. He advocated for a 25 basis points increase in interest rates to align with market expectations, driven by the need to curb rising inflation, which has become entrenched in the economy. “The committee should remain focused on maintaining price stability, especially as inflationary pressures persist despite previous rate hikes. However, a hold or even a dovish move could be on the table if the rebased Consumer Price Index (CPI) figures for January 2025, released by the NBS, indicate a significant decline from the 34.60 per cent recorded in December 2024,” he said. Abuede said a lower inflation print may prompt the MPC to prioritise economic growth over further tightening, particularly if other macroeconomic indicators suggest easing cost pressures.

Also speaking, Chief Executive Officer, Centre for the Promotion of Private Enterprise, Muda Yusuf, said the MPC should hold rates for now. According to him, the MPC is expected to begin gradual relaxation of the tightening of the monetary policy. He said although relaxing the benchmark interest rate may not be feasible, given the well-known disposition of the central bank, but the reality of the moment requires that rates be held. Yusuf said that already, there has been some stability in the exchange rate, having regard to the fact that there is already what can be regarded as an overdose of monetary policy tightening instruments.

He said: “Monetary Policy Rate (MPR) is already at around 27.5 per cent and the Cash Reserve Requirement (CRR) is already at 50 per cent, which are practically the limits that monetary policy can be pushed for now. Interest rate now for many businesses is over 35 per cent, and it should not get worse than that. So, my expectation is that the rates should be put on pause for now while we await the outcomes of the rebasing of the Gross Domestic Product (GDP) and the Consumer Price Index. And, we also agreed with the central bank to accelerate efforts to ensure that we have a more robust development finance window. There is no way the real sector of the economy can survive under this kind of monetary regime,” he said.

Yusuf acknowledged being aware of the operations of the Bank of Industry and the Bank of Agriculture, but emphasised that many of these institutions are significantly undercapitalized, with the Bank of Agriculture, in particular, being almost moribund. “We need to tackle food inflation which is a major factor in our current inflation. So, we need to do a lot more in the area of development finance, why the CBN continues to pursue is the orthodox monitoring policy,” he stated.

More so, analysts from the Nigeria Economic Summit Group said easing of inflation is also expected to influence monetary policy. The CBN’s MPC may adopt a more accommodative stance in late 2025, potentially lowering interest rates to stimulate economic activity. This shift would mark a departure from the current tight monetary policy regime aimed at controlling inflation.

Long battle against inflation

For the CBN, there has never been a better time to prioritise price and exchange rate stability, catalyse sustainable economic growth, and protect the livelihoods of millions of Nigerians than now. Its policies, including the exchange rate unification, have led to significant foreign capital inflows to the economy while reducing its intervention in the forex market. The floatation of the naira and the clearing of over $7 billion FX backlog improved the country’s outlook with foreign investors as well as multilateral organisations, like the World Bank describing it as bold intervention to improve the economy’s sustainability in the long run.

Read Also: CBN moves to tame inflation with new policy measures

Cardoso disclosed that upon assuming office, his leadership prioritised rebuilding Nigeria’s economic buffers and strengthening resilience. Before he assumed office, inflation, which had surged to 27 per cent, was one of the most pressing challenges, partly driven by excessive money supply growth. While the GDP growth had stagnated at a meagre 1.8 per cent over the previous eight years, money supply expanded rapidly, averaging about 13 per cent growth annually.

This imbalance not only fuelled inflation but also contributed to a significant depreciation of the naira. He explained that inflation creates uncertainty for households and businesses, acting as a silent tax by eroding purchasing power and driving up living costs. The nation was also grappling with a fiscal crisis, marked by unsustainable deficit financing through the CBN’s Ways and Means advances, which had reached an unprecedented N22.7 trillion by 2023—equivalent to almost 11 per cent of the GDP. In addition, quasi-fiscal interventions by the CBN, totalling over N10 trillion, undermined market confidence and weakened the effectiveness of its policy tools.

Against these odds, the CBN under Cardoso has brought new hopes in the management of the financial system and economy. The current macroeconomic stabilisation efforts support Nigeria’s ability to attract foreign investors to its markets. For instance, at the end of 2024, Nigeria leveraged its improved economic fundamentals to re-enter the Eurobond market, seeking to address its fiscal deficit. The move marked the country’s return to the international debt market in November after a two-year absence. In a dual-tranche Eurobond issuance, investor demand surged, with subscriptions exceeding $9 billion.

Despite the strong interest, the government chose to raise $2.2 billion. The issuance included $700 million in 6.5-year bonds set to mature in 2031, carrying a 9.625 per cent coupon rate, and $1.5 billion in 10-year bonds with a coupon rate of 10.375 per cent. The high-interest rate environment also attracted higher foreign portfolio investment inflows, which totalled $3.48 billion in the first half of 2024 compared to $756.1 million during the same period in 2023. This trend reflects growing investor confidence in the country’s ability to manage its external debt burden, a positive signal for Nigeria’s Eurobonds.

Views from other stakeholders

Expectedly, Comercio Partners, in its 2025 macroeconomic outlook, highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would also create statistical effects that could lower inflation figures. According to head of investment research and global macro strategist, Ifeanyi Ubah, “We expect headline inflation to decrease to around 15 per cent in the first half of 2025, indicating a gradual return to economic stability.”

The report also emphasised the importance of local refining capacity expansion, particularly with the launch of the Dangote Refinery. This development is expected to reduce the impact of exchange rate fluctuations on energy prices. By relying more on domestically refined petroleum, Nigeria is likely to see a reduction in energy price volatility. This, combined with a more stable exchange rate, is expected to lower production and transportation costs, creating a positive ripple effect throughout the broader economy.

The NBS announced plans to update the base year for calculating the Consumer Price Index (CPI) from 2009 to 2024. Initially, this adjustment is expected to lower the headline inflation figures, the report said. However, a deeper analysis suggests a more complex picture. Although the rebasing will likely reduce CPI in 2025, it will also lower 2024 figures. It said the direction and magnitude of the Year-on-Year (YoY) inflation will depend on the price changes in each commodity basket over the two periods.

The Nigeria Economic Summit Group (NESG)-Stanbic IBTC Business Confidence Monitor (BCM) report projected that Nigeria’s inflation rate will decline to 27.1 per cent by December 2025, providing a glimmer of hope for businesses and consumers grappling with persistent economic challenges. This forecast reflects a cautious optimism about the gradual stabilisation of Nigeria’s economy as structural reforms begin to take effect, despite ongoing headwinds.

The report forecasts that headline inflation will remain elevated during the first nine months of the year but will decline significantly in the fourth quarter. By December 2025, inflation is expected to settle at 27.1 per cent, down from an average of 30.5 per cent year-on-year. This decline will likely be driven by the normalization of petrol prices, improved exchange rate stability, better fiscal management, and increased agricultural output.

The Central Bank of Nigeria (CBN) has issued a strong warning to banks that restrict customers from withdrawing up to N20,000 per transaction at Automated Teller Machines (ATMs), despite having sufficient funds and requesting a higher amount.

The apex bank made this disclosure in a Q&A explainer on its website following its recent review of ATM withdrawal fees, warning that such restrictions violate its regulations and will attract sanctions.

According to the CBN, ATM charges for withdrawals made from other banks’ ATMs—whether on-site or off-site—are structured on the premise that customers should be able to withdraw up to N20,000 per transaction.

“Any bank that compels a customer with sufficient funds in their account to withdraw less than N20,000 per transaction, against their desire for a higher sum, would be contravening this regulation and will be sanctioned appropriately,” the CBN stated.

Read Also: CBN warns banks against limiting ATM withdrawals below N20,000 per transaction

To address potential violations, the regulator has urged affected customers to report banks that impose such restrictions. “Consumers denied the right to withdraw up to N20,000 per transaction are encouraged to file a complaint with the CBN using cpd@cbn.gov.ng,” it advised.

Additionally, the CBN reaffirmed that banks must not charge customers beyond the prescribed ATM fees but are allowed to charge lower amounts based on their cost structure and business model.

“The charges and surcharges are capped, meaning banks and other financial institutions cannot charge more than the fees stated in the circular. However, a bank can charge a lower amount depending on its cost structure and business development drive,” the statement clarified.

To help customers minimize ATM withdrawal fees, the CBN advised them to withdraw cash from their own bank’s ATMs whenever possible. It also encouraged the use of alternative payment methods such as mobile banking apps, Point of Sale (PoS) terminals, and other digital channels.

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has called on telecom companies to reduce their dependence on foreign imports by producing key materials like SIM cards, cables, and towers locally.

Speaking in Abuja during a visit by Airtel Africa’s management team, led by Group CEO Mr. Sunil Taldar, Cardoso stressed that local production would help reduce pressure on the dollar, create jobs, and boost Nigeria’s economy.

He noted that over the past 16 months, the CBN has worked to stabilize the foreign exchange (forex) market, strengthen the Naira, and attract investors. With these improvements, he urged telecom firms to embrace “backward integration”—a strategy where companies source and produce essential materials locally instead of relying on imports.

Beyond industry reforms, Cardoso noted the CBN’s broader goal of making financial services more accessible to Nigerians, especially in rural areas. He announced plans for a high-level summit where the CBN and industry leaders will discuss ways to improve digital payments and financial inclusion.

Read Also: CBN shifts MPC meeting to February 19th, 20th

“The CBN is committed to ensuring that financial services reach more Nigerians, especially in rural and underserved communities. We aim to build a more inclusive and digitally-driven financial system,” he said.

He also assured Airtel and other stakeholders that the CBN would continue to create a business-friendly environment that encourages competition, innovation, and wider access to financial services.

In response, Airtel Africa’s CEO, Mr. Sunil Taldar, praised the CBN’s reforms and expressed support for local production, saying it would benefit telecom companies in the long run. He also reaffirmed Airtel’s commitment to expanding financial inclusion through technology.

Taldar was accompanied by Airtel Nigeria CEO, Mr. Dinesh Balsingh; Group CFO, Mr. Jaideep Paul; and Director of Corporate Communications and CSR, Mr. Femi Adeniran.