CBN Survey: High Interest Rates Now Nigeria’s Top Business Constraint, Surpassing Insecurity and Power Woes
Nigeria companies claim that high interest rates have become the most serious threat to their operations – more disruptive than insecurity or erratic electricity – according to the latest survey on Nigeria’s Trade expectations (BEs) for June 2025.
The survey, carried out from June 16 to 20 by the Department of Statistics of Banque Apex, covered 1,900 companies in all sectors such as industry, agriculture, construction, large / retail and services. He noted that companies have given high interest rates an index of constraints of 75.6, by ahead of insecurity (75.2) and an insufficient power supply (74.3) – two problems which historically exceeded the list of economic bottlenecks of Nigeria.
“Respondents identified a high interest rate (75.6), insecurity (75.2) and insufficient electrical food (74.3) such as the three main commercial constraints in June 2025,” said the CBN.
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The result highlights the growing pressure on business finances, especially among small and medium -sized enterprises (SMEs), because Nigeria maintains a narrow monetary policy to slow down inflation and stabilize the Naira.
How the interest rate has become a greater threat than insecurity
The increase in interest rates because the higher stress reflects a change in the risk profile that companies are now confronted. Since the beginning of 2024, the CBN has grown aggressively its rate of reference monetary policy (MPR) to slow down inflation, which culminated almost 34% in April before moderating slightly. The MPR is currently 27.5%, with commercial loan rates in some cases exceeding 30%, which makes it extremely difficult for companies to access an affordable credit.
Although insecurity – especially in the northwest and average belt – is not a serious operational risk and that poor power supply in continuous electricity to undermine productivity, the financial impact of loan costs is now perceived as more immediate and omnipresent.
Other opposite winds: taxes, bank charges and economic climate
The survey also lists other operational tops. High banking fees marked 73.2, followed by high taxes (68.9) and an unfavorable economic climate (68.7). Unclear economic laws (67.4), mediocre infrastructure (62.4) and an unfavorable political climate (62.5) were also mentioned, although they ranked slightly lower.
According to the CBN, “this suggests that commercial constraints are more focused on economic and financial risks than political challenges in the exam period.”
Optimism holding, but not everywhere
However, the prospects remain surprisingly optimistic. The commercial confidence index (BCI) for June was 20.7, the projections showing that it could reach 41.3 in the next six months when companies provide for an improvement in economic activity.
Optimism varies considerably depending on the region. In the south-east, confidence is the lowest at 4.4, the CBN attributing this to the acute effect of high interest rates and slow local activity. On the other hand, the Northeast has recorded the highest optimism at 37.1, because some companies see more stable conditions and anticipate rescue measures.
The BS also found that companies expect Naira to appreciate in the coming months, pulled by a mixture of stricter monetary orders and improving exchange entries. However, the expectations of an additional increase in borrowing costs persist, which argues concerns about access to capital.
Political implications: MPC holds or cuts?
The CBN Monetary Policy Committee (MPC) is currently meeting and analysts are divided during the next decision. While many expect the bank to hold the MPR at 27.5% for a third consecutive third step, others bet on a modest rate reduced to 27.25%, perhaps accompanied by settings in the asymmetrical corridor as a signal for the calibration of prudent policy.
In summary, the increase in interest rates as the main commercial constraint of Nigeria indicates a central change in the way in which companies have economic difficulties. While physical threats such as insecurity and mediocre infrastructure remain persistent, the borrowing of the loan now takes the front of the stage – expressing even more pressure on the CBN to balance monetary tightening with policies that promote growth and productivity.
On June BE, BEP depicts a cautious optimism painting wrapped in frustration, while businesses sail on land where costs are climbing and opportunities are tightening. The question of whether it changes after the MPC meeting could define the tone of the Nigeria commercial environment for the rest of the year.
