The Central Bank of Nigeria’s (CBN) October 2024 Inflation Expectations Survey (IES) has revealed an increasing demand among Nigerian businesses for interest rate reductions, with 76% of respondents—both households and businesses—calling for lower rates to ease mounting economic pressures.
As inflation continues to rise, businesses report high costs as a major challenge, fueling the push for rate cuts to stimulate growth and consumer spending.
This year’s survey gathered insights from 1,750 businesses and 1,665 households across all 36 states and the Federal Capital Territory. The results show a notable increase in support for rate cuts, up from 71.4% in September, with only 16.5% of respondents favoring stable rates and a minority 7.5% advocating for a rate hike.
Among businesses, particularly micro and small enterprises, inflationary pressures have heightened, with escalating costs for energy, transportation, and raw materials cited as primary concerns.
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High borrowing costs are compounding these challenges, making it difficult for businesses to manage expenses and maintain profitability. Micro-enterprises in urban areas are feeling the impact most, while smaller rural businesses experience somewhat milder effects due to localized economic conditions.
Inflation concerns are particularly pronounced among middle-income business owners and professionals, with many noting that increased operational expenses are impacting their ability to expand. Meanwhile, businesses in sectors tied to essential services report a disproportionate burden from rising costs. In response, business leaders are advocating for policies that support economic relief through lower borrowing rates and cost stabilization.
Despite current pressures, there is cautious optimism for moderate inflation relief in the coming months, especially among businesses expecting seasonal adjustments in the food and goods sectors. This hopefulness may also reflect potential policy actions that could stabilize costs and support economic growth.
With inflation at the forefront of business and consumer concerns, this survey underscores a pivotal moment for policymakers to consider rate adjustments that could foster economic resilience, especially as businesses strive to navigate a challenging financial landscape.
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