Firms expect naira to appreciate in March —CBN survey
A recent Business Expectations Survey conducted by the Central Bank of Nigeria (CBN) from February 10-14, 2020 has shown that firms expect the Naira to appreciate in February, March and next twelve months, as their confidence indices stood at 19.1, 32.6 and 41.9 index points, respectively.
The survey with a sample size of 1050 businesses nationwide also showed that firms expect borrowing rates to rise in the current month, next month and the next twelve months, as the confidence indices stood at 3.5, 4.2 and 4.3 points, respectively.
Similarly, firms expect the average inflation rate in the next six months and the next twelve months to stand at 11.6 and 11.8 percent, respectively.
On Economic growth rate, the survey indicate that firms anticipate improvements in economic conditions, as the index on economic growth rate in the short run stood at 31.2, 43.3 and 49.5 points for the current month, next six months and next twelve months, respectively.
The CBN further revealed that firms expresed satisfaction with the management of inflation by the government, with a positive net satisfaction index of 2.4 in February 2020.
Further highlights of the outcome of the Business Expectations Survey in February 2020 are as follows: respondent firms expressed optimism on the macro economy; outlook on the volume of total order, business activity and financial conditions (working capital) were positive during the review period.
However, firms identified insufficient power supply, financial problems, high interest rate, unfavourable economic climate, unclear economic laws, unfavourable political climate, access to credit and competition as major factors constraining business activity.
The apex bank noted that a response rate of 97.1 per cent was achieved, and the sample covered the services, industrial, wholesale/retail trade, and construction sectors.
The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses while the services sector is made up of Financial Intermediation, Hotels & Restaurants, Renting & Business activities and Community & Social Services.