Nigeria Economic Update (Issue 23)

A recently released CBN report indicates a weakened business outlook of -66.2 points for the month of May. The agriculture and service sectors are the worst hit, recording a decline in activity of -37.7 index point for May. According to the survey the pessimism is maintained in June as businesses expect an economic outlook of -4.2². The employment outlook is pessimistic across the construction, manufacturing, agriculture, and service sectors as employment is expected to decline by -18.5, -10.9, and -4.1 points respectively. The weakened outlook towards the macroeconomy results from limited economic activity with businesses that are import and/or export-oriented and those that are neither import nor export-oriented expressing pessimism. Considering that the factors that constrain business activity including power supply insufficiencies, access to finance and credit, high-interest rate, and insufficient demand are still present, the business outlook in the coming months is expected to continue to weaken considerably.