MORGANABLE BUSINESS / COMPANIES
Nigerian businesses are facing a wave of pressure from high taxes, insecurity and expensive borrowing, according to the Central Bank of Nigeria’s (CBN) Business Expectations Survey.
Akure —
Nigerian businesses are facing a wave of pressure from high taxes, insecurity and expensive borrowing, according to the Central Bank of Nigeria’s (CBN) Business Expectations Survey. The September 2026 survey showed that these three issues remained the biggest constraints affecting firms, even as business confidence stayed positive.
High and multiple taxation ranked first among the concerns raised by businesses. It recorded 67.1 index points in the survey. Insecurity followed closely at 66.2 points, while high interest rates recorded 64.3 points.
The figures show that companies are dealing with several costs at the same time. While taxes reduce available funds, insecurity can disrupt operations and supply chains. At the same time, high borrowing costs make it harder for businesses to finance expansion, purchase equipment or manage working capital.
The tax burden remains important for businesses across Nigeria. Although the government has introduced reforms aimed at simplifying the tax system, companies continue to report multiple demands from tax authorities and other agencies.
The Manufacturers Association of Nigeria (MAN) also identified multiple taxation as a major challenge for manufacturers in its second-quarter 2026 confidence index. Manufacturers said different authorities continued to demand various taxes and levies, raising concerns about how quickly the reforms are translating into lower compliance pressure.
However, the tax environment is changing. From October 1, 2026, the Federal Government introduced a new market-linked interest system for late tax payments. Under the arrangement, interest on naira-denominated tax liabilities is tied to the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point, subject to a floor linked to the 364-day Treasury Bill yield.
For businesses, the new system creates a stronger reason to settle tax obligations on time. The government has argued that taxpayers should not gain cheaper financing by delaying payments that are already due. However, companies with tight cash flow will still need to manage their tax obligations carefully.
Meanwhile, insecurity remains another major obstacle to business activity. The CBN survey placed insecurity at 66.2 points, making it the second-highest constraint reported by firms. Security challenges can increase operating expenses, restrict movement and affect access to markets.
For companies that move goods across long distances, insecurity can also create additional logistics risks. Businesses may spend more on security arrangements, insurance and alternative routes. Consequently, these costs can eventually affect prices and reduce profit margins.
Insecurity can also discourage investment. When companies cannot confidently predict whether their workers, assets or goods will remain safe, they may delay expansion plans. Smaller businesses can face an even greater burden because they often have fewer resources to absorb unexpected losses.
High interest rates complete the three major pressures highlighted by the CBN survey. Businesses recorded 64.3 points for high interest rates, showing that access to affordable credit remains a major concern.
Although borrowing conditions are expected to improve modestly, firms still anticipate elevated borrowing rates across the coming review periods. This means businesses may continue to face difficulties when they seek loans to increase production, hire workers or invest in new technology.
High rates can also affect companies that already have outstanding loans. As financing costs rise, firms may devote a larger share of their revenue to debt servicing. Therefore, they may have less money available for salaries, expansion, inventory and other productive activities.
Despite these challenges, the survey did not present an entirely negative picture. Nigeria’s Business Confidence Index stood at 13.4 points in September. Although this represented a decline from August, it remained positive.
Firms linked their optimism mainly to stronger demand, economic diversification and improved access to finance. Increased demand accounted for 29.3 percent of the reasons behind the positive outlook, while economic diversification contributed 18.9 percent. Access to finance accounted for another 13.5 percent.
The industry sector recorded the strongest improvement during the month. Its confidence index rose from 17.1 points in August to 19.4 points in September. However, services moderated from 13.3 to 10.2 points, while agriculture declined from 13.9 to 12.8 points.
The outlook also suggests that businesses expect conditions to improve further. The CBN survey projected business confidence at 23.6 points in December 2026 and 36.1 points by March 2027. This indicates that firms still see opportunities despite the pressures affecting their operations.
Still, the gap between optimism and current challenges remains significant. Businesses may expect stronger demand in the future, but they must first navigate the costs facing them today. For many firms, the combination of taxation, insecurity and expensive credit can limit how quickly they respond to new opportunities.
The government therefore faces pressure to ensure that reforms produce practical relief for businesses. Reducing overlapping taxes and levies could improve cash flow, while stronger security could lower operating risks. At the same time, more affordable credit would give companies greater room to invest and expand.
The latest findings also underline the importance of a stable business environment. Clearer regulations, reliable infrastructure and lower financial costs can help companies plan with greater confidence. In turn, stronger businesses can support employment, production and government revenue.
For now, Nigerian firms remain caught between difficult operating conditions and cautious optimism. The CBN survey shows that businesses are not giving up on growth, but they continue to face serious obstacles. As a result, the success of ongoing economic reforms will depend not only on policy announcements but also on how quickly businesses feel the benefits.
If taxes become easier to manage, security improves and borrowing costs gradually fall, firms could gain more room to grow. Until then, the CBN figures make clear that tax pressure, insecurity and high interest rates remain central concerns for Nigeria’s business community.
