CBN Survey: Nigerian Businesses Expect Loan Interest Rates to Ease Despite High Borrowing Costs

Nigerian businesses are optimistic that borrowing costs could begin to decline over the next three months, even as bank loan interest rates remain high, according to the latest Business Expectations Survey released by the Central Bank of Nigeria (CBN).

The report shows that while businesses still consider lending rates expensive, many expect a gradual reduction in borrowing costs in the near to medium term. The CBN noted that borrowing rate indices remained consistently positive, hovering between 18 and 19 points, indicating expectations of a modest easing in interest rates.

“Respondents expect borrowing rates to remain elevated across the same periods, as indicated by the consistently positive borrowing rate indices. The relatively stable indices, fluctuating around 18–19 points, suggest expectations of a marginal decrease in borrowing costs over the near-to-medium term,” the apex bank stated.

Despite concerns over financing costs, business confidence remained positive. The survey recorded a Business Confidence Index of 5.7 points, reflecting continued optimism among formal businesses about the country’s economic outlook.

The CBN attributed the positive sentiment to stronger demand, which accounted for 22.3 percent of responses, followed by economic diversification at 21.4 percent and improved access to finance at 15 percent. However, businesses expressed concern over persistent inflation, insecurity, energy challenges and geopolitical uncertainties, which continue to weigh on economic activities.

Looking ahead, the apex bank said businesses remain optimistic about the next six months, with confidence indicators across all sectors staying in positive territory throughout the review period.

The survey also identified the biggest obstacles facing businesses in Nigeria. High and multiple taxation ranked as the most significant challenge with an index score of 70.8, followed by insecurity (69.7) and high interest rates (66.3). Other major concerns included an unfavourable political climate, high bank charges, intense competition, unclear economic laws, financial constraints and poor infrastructure.

On expansion prospects, the electricity, water and gas sector recorded the strongest outlook with an expansion index of 85.7 points, suggesting growing investment expectations in the sector. Meanwhile, employment projections remained cautious across most industries, although the Mining and Quarrying sector recorded the most optimistic hiring outlook for August 2026.