A recent Business Expectations Survey conducted by the Central Bank of Nigeria (CBN) has once again highlighted insecurity as the most serious challenge facing businesses operating in the country.
Firms across different sectors of the economy now consider insecurity a greater obstacle than inflation, taxation, and high interest rates, all of which have also remained persistent concerns in recent years.
The survey reflects the experiences of thousands of businesses operating in agriculture, manufacturing, construction, trade, and services.
Many respondents indicated that the security situation in several parts of the country is directly affecting production, movement of goods, supply chains, and overall profitability. Issues such as armed attacks on rural communities, kidnapping incidents along major highways, and sporadic unrest in some regions continue to create uncertainty for both investors and business operators.
For agricultural businesses in particular, insecurity has had a severe impact. Farmers in various parts of the country face risks of displacement, destruction of farmlands, and limited access to markets due to unsafe roads.
This has contributed not only to reduced agricultural output but also to rising food prices in urban areas. Many farmers are now forced to either reduce the size of their farmlands or abandon certain locations entirely, which has long-term implications for food security in Nigeria.
Transportation and logistics companies have also been heavily affected. The survey revealed that businesses involved in moving goods across regions now spend significantly more on security escorts, insurance coverage, and alternative routes. In some cases, companies are even avoiding certain highways or regions altogether, leading to delays in delivery times and increased operational costs. These inefficiencies are ultimately passed on to consumers, contributing indirectly to inflationary pressure in the economy.
Beyond insecurity, the survey also highlighted the burden of multiple taxation as a major concern for Nigerian businesses. Many companies reported being subjected to overlapping taxes and levies from federal, state, and local government authorities. This situation often leads to confusion, compliance difficulties, and increased financial strain, especially for small and medium-sized enterprises (SMEs). SMEs, which form a large portion of Nigeria’s private sector, are particularly vulnerable because they have limited financial buffers to absorb rising costs.
Another critical issue raised in the report is the high cost of borrowing.
Businesses noted that elevated interest rates have made access to credit increasingly difficult. While monetary tightening policies are aimed at controlling inflation, they have also reduced the ability of businesses to secure affordable loans for expansion, equipment purchase, and working capital. As a result, many firms are delaying investment decisions or scaling down planned projects.
Despite these challenges, the CBN survey also presented a cautiously optimistic outlook for the Nigerian business environment. The overall business confidence index remained in positive territory, indicating that many firms still expect conditions to improve over time. This optimism is largely driven by expectations of policy reforms, improved oil revenues, and gradual stabilization of macroeconomic conditions.
The report also showed differences in confidence levels across sectors. The mining and quarrying sector recorded the strongest optimism, driven by global demand for minerals and potential investment inflows.
Agriculture, despite its challenges, still maintained a relatively stable outlook due to its essential role in food supply. The manufacturing sector, however, remained more cautious, largely due to rising production costs, foreign exchange volatility, and infrastructure limitations such as unstable electricity supply.
Regional disparities were also evident in the findings. Businesses in some northern regions reported slightly higher confidence levels, possibly due to ongoing government and security interventions in certain areas.
Meanwhile, some southern regions expressed more concern over operational costs and regulatory pressures. These variations highlight the uneven nature of Nigeria’s economic and security landscape, where conditions differ significantly depending on location and industry.
Electricity supply challenges were also indirectly reflected in the responses. Many businesses indicated that erratic power supply continues to increase production costs, forcing firms to rely heavily on generators and alternative energy sources. The cost of fuel and maintenance for these alternatives adds further strain to already tight profit margins.
Financial experts interpreting the survey have emphasized that insecurity remains a structural issue with wide-ranging economic consequences. They argue that beyond its immediate impact on safety, insecurity discourages both domestic and foreign investment, reduces productivity, and weakens investor confidence in the long term. Without significant improvements in security conditions, they warn that other economic reforms may not achieve their full impact.
Policy analysts also stress the importance of coordinated action between federal and state governments in addressing insecurity. They suggest that investment in intelligence gathering, community policing, border security, and technology-driven surveillance could help reduce crime and improve safety across vulnerable regions. In their view, restoring confidence in the security environment is essential for unlocking Nigeria’s full economic potential.
At the same time, business leaders are calling for reforms to reduce the burden of taxation and improve the ease of doing business. They argue that simplifying the tax system, eliminating multiple levies, and improving transparency in revenue collection could significantly boost business growth and encourage formal sector expansion.
The survey ultimately paints a mixed picture of Nigeria’s business climate.
While there are signs of resilience and cautious optimism, the persistent challenges of insecurity, high operating costs, and financial constraints continue to weigh heavily on economic activity. Businesses are adapting as best as they can, but many agree that sustained progress will depend on how effectively these structural issues are addressed.
In conclusion, the CBN report serves as a strong reminder that Nigeria’s economic growth is closely tied to its security situation. Until insecurity is significantly reduced, businesses are likely to continue operating under pressure, with limited capacity for expansion and long-term planning.
Addressing these challenges, experts say, will require not only economic reforms but also decisive and sustained improvements in national security management.
